Download - Acquittal Report Annex C: Public Hospitals
Victorian Auditor-General’s Report February 2011 2010-11:19
Acquittal Report Annex C:Public Hospitals
Acquittal R
eport Annex C
: Public H
ospitals2010
-11:19Feb
ruary 2011
Published by the Victorian Auditor-General’s Office Level 24, 35 Collins Street, Melbourne Victoria 3000 Tabled in the Victorian Parliament February 2011 PP No 4, Session 2010–11 This report consists of five parts: Acquittal Report: Results of the 2009–10 Audits Annex A: Portfolio Departments and Associated Entities Annex B: Local Government Annex C: Public Hospitals Annex D: Water Entities © State of Victoria 2011 ISBN: 978 1 921650 65 9 2010–11:19
Ordered to be printed
VICTORIAN GOVERNMENT PRINTER
V I C T O R I A
Victorian Auditor-General
Acquittal Report Annex C:
Public Hospitals
Victorian Auditor-General’s Report Acquittal Report Annex C: Public Hospitals iii
Contents
Audit summary............................................................................................. v Results of audits .......................................................................................................v
Quality of financial reporting .....................................................................................v
Financial sustainability ..............................................................................................v
Recommendation.................................................................................................... vii
Submissions and comments received .................................................................... vii
1. Results of audits......................................................................................1 1.1 Scope .............................................................................................................. 2
1.2 Reporting framework ....................................................................................... 3
1.3 Audit opinions issued ...................................................................................... 4
2. Quality of financial reporting.....................................................................5 2.1 Introduction...................................................................................................... 6
2.2 Preparation of a financial report ...................................................................... 6
2.3 Timeliness ....................................................................................................... 7
2.4 Accuracy.......................................................................................................... 8
3. Financial sustainability ...........................................................................11 3.1 Introduction.................................................................................................... 12
3.2 Financial performance................................................................................... 12
3.3 Financial position........................................................................................... 14
3.4 Financial sustainability .................................................................................. 15
3.5 Financial sustainability risk assessment........................................................ 25
Appendix A. Audit status............................................................................31
Appendix B. Financial sustainability ............................................................39
Appendix C. Audit Act 1994 section 16—submissions and comments ......61
Victorian Auditor-General’s Report Acquittal Report Annex C: Public Hospitals v
Audit summary This annex sets out the results of the audits of 112 entities comprising 87 public hospitals and 25 associated entities. An assessment is also made of the financial sustainability of public hospitals.
Results of audits Independent audit opinions add credibility to financial reports by providing assurance that the information is reliable.
Parliament can have confidence in the financial reporting by public hospitals because all 112 entities have finalised their 30 June 2010 financial reports and received clear opinions.
Quality of financial reporting The quality of financial reporting can be measured by the timeliness and accuracy of the preparation and finalisation of the financial report.
The financial reporting processes at public hospitals were generally adequate. However, further improvement could be achieved by developing a financial report preparation plan, preparing shell financial statements, conducting materiality assessments and adopting rigorous analytical reviews on the financial report.
With respect to timeliness, the average time taken to finalise financial statements improved substantially reducing from 10.0 weeks in 2008–09 to 7.9 weeks in 2009–10. Given the improved time frames achieved in 2009–10, public hospitals should maintain this momentum of earlier reporting.
Financial sustainability Financial sustainability analysis has been provided for the 87 public hospitals.
To be financially sustainable, public hospitals need the capacity to meet current and future expenditure as it falls due. They should also be able to absorb foreseeable changes and risks materialising, without significantly changing their revenue and expenditure policies.
Insight into the financial sustainability of public hospitals is obtained from an analysis of five financial sustainability indicators over a five-year trend period. The results of these indicators should be considered in the context of the environment in which these hospitals operate.
Audit summary
vi Acquittal Report Annex C: Public Hospitals Victorian Auditor-General’s Report
The four core indicators used are underlying result, liquidity, self-financing and capital replacement. These indicators reflect each public hospitals funding and expenditure policies, and indicate whether these policies are sustainable.
A fifth indicator has been adopted for public hospitals which measures the average number of days cash available. This is a short-term indicator to show the level of unrestricted cash a public hospital has available to cover operating cash outflows.
A summary of the five-year average financial sustainability results for each public hospital category is provided in Figure A.
Figure A 2009–10 financial sustainability risk assessment – public hospitals
Category High Medium Low Public Hospitals Metropolitan 11 7 – Regional 8 7 – Rural 7 35 12 Total 26 49 12 Source: Victorian Auditor-General's Office.
Our financial sustainability assessment is that 26 public hospitals were high risk at 30 June 2010 (28 in 2008–09). This arises most commonly because they were generating insufficient cash to be able to adequately fund their operations.
In 2009–10, 69 public hospitals recorded a negative underlying result compared to 39 in 2008–09. This was due to higher depreciation charges in 2009–10 as a result of the revaluation of hospital buildings at the end of 2008–09.
Prudent financial management practice is that at least one month’s operating cash outflows be available as unrestricted cash holdings, consistent with the departmental funding model. On average the metropolitan and regional hospitals were not able to fund their operations for more than 22 and 27 days respectively, as at 30 June 2010.
Consistent with this outcome and our liquidity risk assessment, the Department of Health concluded that 30 public hospitals in 2009–10 (31 in 2008–09), did not comply with the going concern test in the Australian accounting standards. Those hospital boards were provided with a letter of comfort outlining that the department would provide adequate cash flows to enable them to meet their financial obligations up to September 2011, should this be required.
Over the five-year period, public hospitals have consistently had a self-financing ratio of less than 10 per cent, indicating they cannot effectively replace their assets over the long term using income generated by their operations. Under these circumstances there is a greater reliance on the provision of additional government funding for asset renewal and replacement.
Audit summary
Victorian Auditor-General’s Report Acquittal Report Annex C: Public Hospitals vii
The ability of public hospitals to generate a sufficient surplus from operations to be able to fund their operations, asset replacement and new asset acquisition depends largely on the funding policies established by the Department of Health and on each hospital’s expenditure management and revenue maximisation practices.
The financial sustainability indicators used in this report highlight trends that need to be monitored. A core consideration is that capital grant funding is allocated strategically across the sector rather than progressively to each public hospital. However, public hospitals are governed by boards which are accountable for financial management and performance. This situation blurs public hospital boards’ accountability for governance and performance and can impact operational performance.
Recommendation Number Recommendation Page
1. Public hospitals should adopt the shortened annual reporting time frames achieved for the 2009–10 reporting cycle as the standard for future reporting cycles.
8
Submissions and comments received In addition to progressive engagement during the course of the audit, in accordance with section 16(3) of the Audit Act 1994 a copy of this report, or relevant extracts from the report, was provided to the Department of Health and named public hospitals with a request for submissions or comments.
Agency views have been considered in reaching our audit conclusions and are represented to the extent relevant and warranted in preparing this report. Their full section 16(3) submissions and comments, however, are included in Appendix C.
Victorian Auditor-General’s Report Acquittal Report Annex C: Public Hospitals 1
1 Results of audits
At a glance Background This annex covers 112 entities from the public hospitals sector which have a financial year end of 30 June 2010. It deals with the audits of 87 public hospitals and 25 associated entities.
Findings All public hospitals and associated entities’ 2009–10 financial reports received clear audit opinions.
Results of audits
2 Acquittal Report Annex C: Public Hospitals Victorian Auditor-General’s Report
1.1 Scope This annex deals with the results of the audit of 87 public hospitals and 25 associated entities with 30 June 2010 balance dates, as shown in Figure 1A.
Figure 1A Public hospitals and associated entities
Hospital category 2009 2010 Metropolitan
Public hospitals 18 18 Entities controlled by public hospitals 14 15
Regional Public hospitals 15 15 Entities controlled by public hospitals 2 2
Rural Public hospitals 55 54 Entities controlled by public hospitals 6 7 Other associated entities 4 1
Total 114 112 Source: Victorian Auditor-General's Office.
Entities controlled by public hospitals generally comprise foundations and trusts, while associated entities are rural health information technology alliances. Appendix A provides a list of all public hospitals and associated entities.
Figure 1A shows a decrease of two in the total number of entities that were subject to audit in 2009–10. A list of all changes is provided in Figure 1B.
Figure 1B Changes to audited entities
New audits East Grampians Health Building for the Future Foundation was created on 1 July 2009 as a charitable fund to facilitate contributions for the East Grampians Health Service.
Parkville Comprehensive Cancer Centre Limited and the Parkville Comprehensive Cancer Centre Joint Venture were created on 11 November 2009 to provide a coordinated approach to cancer treatment and research. Wound up Northern After Hours Clinic ceased trading on 30 June 2009 and was deregistered with the Australian Securities and Investment Commission on 17 September 2009. Merged with another entity
Robinvale District Health Services and Manangatang and District Hospital were amalgamated pursuant to section 115U(1)(b) of the Health Services Act 1988. No longer audited by the Auditor-General Three rural health information technology alliances were restructured by the Department of Health as unincorporated joint ventures and as such are not subject to the requirements of the Financial Management Act 1994 or the Audit Act 1994. Source: Victorian Auditor-General’s Office.
Results of audits
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1.2 Reporting framework A total of 89 public hospitals and associated entities prepare financial reports in accordance with the Financial Management Act 1994 (FMA). Sixteen entities prepare their financial reports under the Corporations Act 2001 and seven do not report under a legislative framework.
The FMA requires annual reports to be submitted to the relevant minister. These reports should be tabled in Parliament within four months of the end of the financial year, and include financial reports for the entity and any controlled entities, which are required to be prepared and audited in 12 weeks.
The 16 entities reporting under the Corporations Act 2001 are required to report to their members within four months of the end of the financial year.
Financial statements are required to be prepared in accordance with Australian accounting standards, including Australian accounting interpretations.
Under the FMA the Minister for Finance has the authority to issue directions in relation to finance administration and reporting issues.
Figure 1C outlines the legislated reporting time frames.
Figure 1C Legislated financial reporting time frames
August July September October November Submitted to Auditor-General within eight weeks of financial year end.
Annual report to members within four months of financial year end.
Submitted to the minister on or before end of September.
Tabled in Parliament within four months of financial year end.
Audit opinion within four weeks of receipt of the financial report.
FMA Financial report Annual report
Non-FMA
Corporations Act 2001
Source: Victorian Auditor-General's Office.
Results of audits
4 Acquittal Report Annex C: Public Hospitals Victorian Auditor-General’s Report
1.3 Audit opinions issued Audit opinions have been issued on the 112 public hospital and associated entities’ financial reports. All opinions issued were clear (114 clear opinions issued in 2008–09).
Independent audit opinions add credibility to financial reports by providing assurance that the information is reliable.
A clear audit opinion confirms that the financial report has been prepared according to the requirements of relevant accounting standards and legislation.
Victorian Auditor-General’s Report Acquittal Report Annex C: Public Hospitals 5
2 Quality of financial reporting
At a glance Background The timeliness and accuracy of the preparation and finalisation of a financial report underpins its quality. To achieve efficient and cost effective practice, reporting entities need to have well planned and managed financial report preparation processes.
Findings • Overall, the financial reporting processes at public hospitals were generally
adequate. However, further improvement is needed in: • financial report preparation plans • shell statements • materiality assessments • rigorous analytical reviews.
• The timeliness of financial reporting improved substantially with the average time taken to finalise financial statements of 7.9 weeks in 2009–10 compared to 10.0 weeks in 2008–09. This momentum of earlier reporting should be maintained.
Recommendation Public hospitals should adopt the shortened annual reporting time frames achieved for the 2009–10 reporting cycle as the standard for future reporting cycles.
Quality of financial reporting
6 Acquittal Report Annex C: Public Hospitals Victorian Auditor-General’s Report
2.1 Introduction The timeliness and accuracy of the preparation and finalisation of the financial report underpins its quality. Public hospitals need to plan for, and allocate sufficient and appropriate resources to financial report preparation. This will allow them to produce a complete, accurate and compliant financial report within the legislative time frame.
2.2 Preparation of a financial report The achievement of better practice financial reporting requires public hospitals to plan and manage the preparation of a financial report. Public hospitals should exhibit the specific practices detailed in Appendix D of the Acquittal Report.
An assessment of public hospitals performance against better practice was based on criteria also outlined in Appendix D of the Acquittal Report. The results of our assessment are summarised in Figure 2A.
Figure 2A Better practice results for public hospital report preparation processes
Source: Victorian Auditor-General's Office.
1
7
1
1
20
3
4
1
21
57
19
24
33
16
32
38
26
33
22
50
12
42
55
44
53
52
27
46
43
53
14
12
22
7
3
17
2
2
12
7
11
2
6
4
Adequate security
Financial compliance reviews
Competency of staff
Reviews of controls/self assessment
Rigorous analytical reviews
Supporting documentation
Rigorous quality control and assurance procedures
Monthly financial reporting
Materiality assessment
Preparation of shell statements
Financial statement preparation plan
Number of hospitals
No existence Developing Developed Better practice
Quality of financial reporting
Victorian Auditor-General’s Report Acquittal Report Annex C: Public Hospitals 7
The areas where better practice is commonly shared by public hospitals include: • monthly financial reporting • supporting documentation • competency of staff • adequate security.
However, further improvement is needed in preparing: • financial report preparation plans • shell statements • materiality assessments • rigorous analytical reviews on the financial report.
Improving these areas will assist the more timely preparation of quality financial reports, improved resource allocation planning and quality assurance procedures, and the earlier detection and correction of errors.
2.3 Timeliness Recognising the accountability role that financial reports serve, public hospitals should prepare and publish timely financial information. The later the reports are produced and published after year end, the less useful they are.
The legislated time frame for public hospitals is to finalise their audited financial reports within 12 weeks of the end of the financial year. In 2009–10, all public hospitals achieved the 12-week time frame, an improvement on 83 out of 88 in the prior year.
The average time taken to finalise financial statements reduced significantly from 10.0 weeks in 2008–09 to 7.9 weeks in 2009–10.
Figure 2B summarises, in percentile bands, the time taken after 30 June for public hospitals to finalise their audited financial reports. It shows significant improvement since last year.
Quality of financial reporting
8 Acquittal Report Annex C: Public Hospitals Victorian Auditor-General’s Report
Figure 2B Time taken for public hospitals to finalise their financial statements
Source: Victorian Auditor-General's Office.
Given the improved time frames achieved in 2009–10, public hospitals should maintain this momentum of earlier reporting.
Recommendation1. Public hospitals should adopt the shortened annual reporting time frames
achieved for the 2009–10 reporting cycle as the standard for future reporting cycles.
2.4 Accuracy The frequency and size of errors in the draft financial statements requiring adjustment are direct measures of accuracy. Ideally, there should be no errors or adjustments.
When the auditor detects errors in the draft financial statements they are raised with management. Material errors need to be corrected before a clear audit opinion can be issued. The hospital itself may also change its draft report after submitting it to audit, if their procedures find that reported information is incorrect or incomplete.
Overall, there are two types of adjustments: • financial balance adjustments—changes to the balances being reported • disclosure adjustments—changes to the commentary or financial note
disclosure within the financial statements.
4 5 6 7 8 9 10 11 12 13 14 15
2010
2009
Elapsed weeks after 30 June
Top 10 percentile 50th percentile 90th percentile Bottom 10 percentile
Avg = 7.9
Avg = 10.0
Quality of financial reporting
Victorian Auditor-General’s Report Acquittal Report Annex C: Public Hospitals 9
In 2009–10, there were a total of 39 material financial balance adjustments to the net result or net asset position reported in the draft financial statements across the 87 public hospitals.
Figure 2C shows the number of material financial balance adjustments by hospital category.
Figure 2C 2009–10 public hospitals—
number of material financial balance adjustments by hospital category
Source: Victorian Auditor-General's Office.
The total value of adjustments on the net asset position was $16.3 million, comprising adjustments to assets of $14.2 million and liabilities of $2.1 million. The total value of adjustments to the net result was $2.4 million, comprising of adjustments to revenue of $3.4 million and adjustments to expenses of $1.0 million.
In addition to the financial balance adjustments, there were 79 disclosure errors that required adjustment in the 2009–10 draft financial statements. Figure 2D shows the number of significant disclosure adjustments by hospital category.
0 2 4 6 8 10 12 14 16 18 20 22 24 26
Rural
Regional
Metropolitan
Quality of financial reporting
10 Acquittal Report Annex C: Public Hospitals Victorian Auditor-General’s Report
Figure 2D 2009–10 public hospitals—
number of disclosure adjustments by public hospital category
Source: Victorian Auditor-General's Office.
The disclosure adjustments were: • financial instruments—adjustments were made to include fair value
measurements and commentary, and to align disclosure with figures reported in the balance sheet
• executive officers and responsible persons remuneration—adjustments were required to reflect actual remuneration paid, and to correct errors in income bands.
The number of adjustments to both financial balances and disclosures at public hospitals indicates a need to improve their financial statement preparation processes.
0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32
Rural
Regional
Metropolitan
Victorian Auditor-General’s Report Acquittal Report Annex C: Public Hospitals 11
3 Financial sustainability
At a glance Background This chapter analyses the financial sustainability of the 87 public hospitals. The analysis is conducted using interrelated financial sustainability indicators which assess a public hospital’s financial performance and position. The indicators analyse past results to identify trends.
To be financially sustainable, public hospitals should have the capacity to meet current and future expenditure as it falls due. They should also be able to absorb foreseeable changes and risks materialising, without significantly changing their revenue and expenditure policies.
Findings • Our financial sustainability assessment shows that 26 public hospitals were
considered high risk at 30 June 2010 (28 in 2008–09). For these public hospitals, short-term financial viability should be monitored and managed.
• Sixty nine public hospitals recorded a negative underlying result compared to 39 in 2008–09. This is due to higher depreciation charges in 2009–10 as a result of the revaluation of hospital buildings at the end of 2008–09.
• Consistent with our liquidity risk assessment, the Department of Health concluded that 30 public hospitals in 2009–10, compared to 31 in 2008–09, did not comply with the going concern test in the Australian accounting standards. These hospital boards were provided with a letter of comfort that the department would provide adequate cash flows to enable them to meet their financial obligations up to September 2011, should this be required.
Financial sustainability
12 Acquittal Report Annex C: Public Hospitals Victorian Auditor-General’s Report
3.1 Introduction Financial sustainability indicators have been provided in this report for the 87 public hospitals. The public hospitals range in size from small rural hospitals to large metropolitan hospitals with annual budgets up to and over a billion dollars. Consistent with these diverse characteristics, the financial performance of individual public hospitals also varies considerably.
This report acknowledges the monitoring regime, including some key financial benchmarks, applied by the Department of Health (DOH) in discharging its legislative responsibilities for evaluating and reviewing publicly funded health services.
3.2 Financial performance The objective for public hospitals should be to generate a sufficient surplus from operations to be able to fund asset replacement, new asset acquisition and retire debt. The ability of public hospitals to achieve this objective depends largely on the funding policies established by DOH and on each hospital’s expenditure management and revenue maximisation practices. This is reflected in the composition and rate of change in their operating revenue and expenses.
Financial performance is measured by the net result—the difference between revenue inflows and expenditure outflows.
Consistent with the provisions of the Health Services Act 1988, public hospital boards and DOH share responsibility for financial performance and management within the sector. DOH directly impacts on the financial performance of individual public hospitals as it is the principal source from which public hospitals receive operating and capital funding in accordance with established funding models.
3.2.1 Public hospital revenue The revenue composition of public hospitals is represented in Figure 3A.
In 2009–10, public hospitals collectively generated $10.1 billion in revenue, an increase of $0.8 billion or 9 per cent from 2008–09 ($9.3 billion). The proportion of revenue generated from each source has not changed significantly over the previous five years. Government funding represents the largest revenue component, providing 79 per cent of total hospital revenue in 2009–10. This is followed by revenue from hospital and community initiatives, which includes funds generated through additional hospital sources, such as pharmacies, car parks and investments.
Financial sustainability
Victorian Auditor-General’s Report Acquittal Report Annex C: Public Hospitals 13
Figure 3A Revenue composition
79%
13%
3%3%2%
State government funding
Hospital and community initiatives
Commonwealth special purpose grants
Private patient fees
Donations and bequests
Source: Victorian Auditor-General's Office.
The growth in revenue is as a result of increased service provision leading to more government funding and an increase in patient fees in line with the consumer price index.
3.2.2 Public hospital expenditure The expenditure composition of public hospitals is represented in Figure 3B.
In 2009–10, public hospitals collectively incurred $10.3 billion of expenditure, an increase of $0.9 billion or 10 per cent compared to 2008–09 ($9.4 in billion).
The growth in expenditure is primarily a result of the 2009–10 depreciation expense almost doubling that recognised in the prior year. As required by Financial Reporting Direction (FRD) 103D, Non-Current Physical Assets, all public hospitals undertook an independent revaluation of their land and buildings as at 30 June 2009. Under these arrangements the fair values of most hospital buildings substantially increased which resulted in a much higher depreciation expense for hospitals over the 2009–10 financial year.
Financial sustainability
14 Acquittal Report Annex C: Public Hospitals Victorian Auditor-General’s Report
Figure 3B Expenditure composition
69%
19%
8%4%
Salaries and other labour costs
Supplies and consumables
Depreciation and amortisation
Other
Source: Victorian Auditor-General's Office.
Additionally, there was a 4.3 per cent ($300 million) increase in employee benefits, in line with the labour price index for public sector employees of 4.5 per cent for the 2009–10 financial year.
3.3 Financial position Financial position is generally measured by reference to net assets, which is the difference between total assets and total liabilities.
As the revenue base for public hospitals is not tied to the value of their asset base and they cannot sell most of their assets to obtain funds, their objective should be to maintain their assets, while managing debt so it can be paid from future operations.
The ability of public hospitals to maintain assets depends on asset and liability management policies, and is reflected in the composition and rate of change in the value of assets and liabilities.
3.3.1 Public hospital assets To 30 June 2010, total public hospital assets remained the same as at 30 June 2009, totalling $10.5 billion. This contrasts with the 26 per cent increase in total assets recognised in 2008–09, which primarily related to a requirement for independent revaluations to be completed at each public hospital for all property, plant and equipment in that year.
The challenge for public hospitals is to make strategic decisions, understanding their full cost implications, about the operation, maintenance, renewal and service levels of these assets. If operating costs grow faster than revenue, then hospitals will find it increasingly difficult to generate the funds necessary for asset maintenance and renewal.
Financial sustainability
Victorian Auditor-General’s Report Acquittal Report Annex C: Public Hospitals 15
The operating and capital funding policies of DOH have a major impact on public hospital asset bases and the ability of hospital boards to manage their assets.
3.3.2 Public hospital liabilities As at 30 June 2010, total public hospital liabilities amounted to $3 billion, an increase of almost 4 per cent ($106 million) compared to the same time in 2009.
Current liabilities increased by 2 per cent, from $2.1 billion in 2008–09 to $2.2 billion in 2009–10. Current liabilities are predominately made up of employee leave provisions and accounts payable. This has not changed significantly from prior years. Non-current liabilities of $843 million for 2009–10 were 9 per cent higher than for 2008–09 where non-current liabilities totalled $776 million. Almost two-thirds of public hospital non-current liabilities relates to borrowings and finance leases at six metropolitan hospitals. Finance leases increased by $73 million or 29 per cent from 2008–09. Non-current employee benefit provisions make up approximately 25 per cent of the total balance and grew by 12 per cent over the financial year.
3.4 Financial sustainability To be financially sustainable, public hospitals need the capacity to meet current and future expenditure as it falls due. They must also be able to absorb foreseeable changes and financial risks as they materialise.
Insight into the financial sustainability of Victoria’s 87 public hospitals is obtained from analysis of five financial sustainability indicators over a five-year trend period. These indicators reflect each hospital’s revenue raising performance and expenditure control, and indicate whether current revenue and expenditure trends and policies are sustainable.
Financial sustainability should be viewed from both a short-term and long-term perspective. The shorter-term indicators provide an insight into the hospital’s ability to maintain a positive operating cash flow and adequate cash holdings, and to provide services over a 12 month period. These are the underlying result, liquidity and average number of days cash available indicators.
The longer-term indicators signify whether there is adequate funding available for spending on asset replacement to enable the hospital to maintain the quality of service delivery and to help meet community expectations and the demand for these services. These are the self-financing and capital replacement indicators.
Notwithstanding the application of transaction neutral Australian accounting standards and accrual accounting by public hospitals, the departmental funding model does not provide for depreciation until DOH has determined the capital requirements of individual hospitals.
Financial sustainability
16 Acquittal Report Annex C: Public Hospitals Victorian Auditor-General’s Report
The departmental funding model therefore allocates capital grant funding strategically across the sector rather than progressively to each hospital. However, public hospitals are governed by boards which are accountable for financial management and performance. This situation blurs accountability for the financial performance of the individual public hospitals and can impact operational performance.
The analysis of financial sustainability in this report reflects on the position of individual public hospitals and for the public hospital sector as a whole, and also on the basis of the three categories of hospitals being metropolitan, regional and rural.
Appendix E of the Acquittal Report describes the sustainability indicators and risk assessment criteria used in this annex.
3.4.1 Underlying result Figure 3C shows that the average underlying result has deteriorated across all categories of public hospitals, particularly rural public hospitals. The trend indicates that expenditure has been growing at a faster rate than revenue. This result has been primarily driven by a significant increase in the depreciation expenses recognised by public hospitals for 2009–10.
Depreciation represents the apportionment of the value of an asset over its expected useful life. The amount of depreciation charged takes account of normal usage, obsolescence, and is commonly expensed evenly over the useful life of the asset.
Figure 3C Average underlying result by hospital category
-5
-4
-3
-2
-1
0
1
2
3
4
2005–06 2006–07 2007–08 2008–09 2009–10
Per cent
Metropolitan Regional Rural
Source: Victorian Auditor-General's Office.
Financial sustainability
Victorian Auditor-General’s Report Acquittal Report Annex C: Public Hospitals 17
As required by Financial Reporting Direction (FRD) 103D, Non-Current Physical Assets, all public hospitals undertook an independent revaluation of their land and buildings in 2008–09, which resulted in an increase in the fair value of most hospital buildings. Depreciation in subsequent periods is calculated based on the revaluation amount, resulting in a greater depreciation expense for 2009–10.
The department’s ‘casemix’, funding model does not take account of non-cash expenditure, such as depreciation, and consequently the underlying result of many public hospitals has deteriorated. Additionally, funds for most asset acquisitions are provided as annual grants, and usually form part of operating revenue in the year of receipt, however this may not match the timing of depreciation as it is incurred.
Figure 3D shows that 13 per cent of public hospitals had a high-risk underlying result of more than negative 10 per cent for 2009–10, which is in contrast to 2008–09 where no public hospital was assessed as high risk. Furthermore the proportion of medium-risk underlying results has increased notably to 66 per cent over the trend period. This represents 58 of the 87 public hospitals at 30 June 2010.
Figure 3D Public hospital underlying result risk assessment
50%58% 58% 55%
21%
49%41% 41%
66%
45%
1%1% 1%13%
0
20
40
60
80
100
2005–06 2006–07 2007–08 2008–09 2009–10
Per cent
Low risk Medium risk High risk
Source: Victorian Auditor-General's Office.
Over time total revenue must equal or exceed total expenditure, or an entity will not be able to sustain its operations. If operating deficits persist there is a real risk that cash reserves become depleted, and that expenditure and capital programs may need to be curtailed. In particular, expenditure that is perceived to be discretionary, especially for maintenance, may be deferred or abandoned should deficits persist over an extended period.
Financial sustainability
18 Acquittal Report Annex C: Public Hospitals Victorian Auditor-General’s Report
Figure 3D shows that there are a significant and increasing proportion of public hospitals recording underlying deficits over the five-year period. Seventy-nine per cent (69 of 87) of hospitals had recorded an underlying deficit for 2009–10, compared with 42 per cent (37 of 88) for 2005–06.
DOH monitors the net result before capital and specific items of public hospitals, rather than the underlying result. The net result before capital and specific items excludes revenue and expenditure types such as: • capital grants and related expenditure • depreciation and amortisation • non-current asset revaluation increments and decrements • reductions in the value of investments • reversals of provisions • the effects of voluntary changes in accounting policies • impairments of financial and non-financial assets.
Under this measure 40 per cent (35 of 87) of public hospitals had recorded a net deficit before capital and specific items for 2009–10. This is notably less than the 79 per cent shown in Figure 3D which uses the underlying result.
3.4.2 Liquidity Public hospital liquidity is monitored by DOH, particularly for the larger metropolitan and regional hospitals. The department considers that a liquidity ratio of less than 0.7 suggests there may be insufficient funds to meet expenditure commitments. The department’s benchmark of 0.7 takes into account the capital funding arrangements it applies to public hospitals.
Figure 3E shows that rural hospitals have the highest average liquidity ratio, measuring 2.11 in 2009–10, while metropolitan and regional hospitals have the lowest, averaging 1.08 and 1.10 respectively.
Financial sustainability
Victorian Auditor-General’s Report Acquittal Report Annex C: Public Hospitals 19
Figure 3E Average liquidity ratio by hospital category
0.0
0.5
1.0
1.5
2.0
2.5
2005–06 2006–07 2007–08 2008–09 2009–10
Metropolitan Regional Rural
Source: Victorian Auditor-General's Office.
There has been a stable positive trend in this indicator across all categories of public hospitals over the past five years. Nevertheless, 29 of the 87 public hospitals had higher current liabilities than current assets in 2009–10. Hospitals in this category must rely on new funds generated in the next financial year to meet some of their existing short-term obligations.
Figure 3F shows that overall the ability of public hospitals to repay their short-term financial obligations has remained consistent over the five-year period, although the position has worsened slightly in 2009–10. This is due to four hospitals moving from a medium-risk assessment to a high-risk assessment, while the number of hospitals assessed as low risk has remained consistent.
Financial sustainability
20 Acquittal Report Annex C: Public Hospitals Victorian Auditor-General’s Report
Figure 3F Public hospital liquidity risk assessment
67%68%69%56%61%
16%21%16%23%17%
21%22% 15% 11% 17%
0
20
40
60
80
100
2005–06 2006–07 2007–08 2008–09 2009–10
Per cent
Low risk Medium risk High risk
Source: Victorian Auditor-General's Office.
During 2010, DOH concluded that 30 public hospitals (31 in 2008–09) did not comply with the going concern test in the Australian accounting standards. This is consistent with the number of hospitals identified in our analysis as having either a high or medium liquidity risk assessment. Consequently, DOH provided the boards of those hospitals with a letter of comfort that it would provide adequate cash flows to enable them to meet their current and future obligations as and when they fall due up to September 2011, should this be required.
Those hospitals, including 15 out of the 33 major metropolitan and regional hospitals, account for 59 per cent of the total turnover of all Victorian public hospitals. Figure 3G provides a listing of hospitals who received a letter of comfort from DOH at 30 June 2010.
Financial sustainability
Victorian Auditor-General’s Report Acquittal Report Annex C: Public Hospitals 21
Figure 3G Public hospitals receiving a letter of comfort from the Department of Health for 2009–10
Metropolitan Rural
• Alfred Health • Alpine Health • Austin Health • Bass Coast Regional Health • Eastern Health • Beechworth Health Service • Melbourne Health • Castlemaine Health • Northern Health • Colac Area Health • Royal Women’s Hospital • Djerriwarrh Health Services • Southern Health • Dunmunkle Health Services Regional • East Wimmera Health Service • Albury Wodonga Health • Heathcote Health • Ballarat Health Services • Hesse Rural Health Service • Barwon Health • Kilmore and District Hospital • Central Gippsland Health Service • Kyneton District Health Service • Echuca Regional Health • Portland District Health • Goulburn Valley Health • Seymour District Memorial Hospital • Northeast Health Wangaratta • South Gippsland Hospital • Wimmera Health Care Group
Source: Victorian Auditor-General's Office.
3.4.3 Average number of days cash available Figure 3H shows that the average number of days of unrestricted cash available at year end to cover operating cash outflows has remained steady for metropolitan and regional hospitals. The position of rural hospitals has deteriorated, however it is still higher on average than the other two categories of hospitals.
Restricted cash, which has been excluded from this analysis, comprises funds held in trust, unspent capital grants, as well as other restricted special purpose funds.
Figure 3H Average number of days cash available by hospital category
0
10
20
30
40
50
60
2005–06 2006–07 2007–08 2008–09 2009–10
Metropolitan Regional Rural Source: Victorian Auditor-General's Office.
Financial sustainability
22 Acquittal Report Annex C: Public Hospitals Victorian Auditor-General’s Report
Prudent financial management practice is that the equivalent of at least one month’s operating cash outflows be available as unrestricted cash holdings, consistent with the departmental funding model. On average the metropolitan and regional hospitals were not able to fund their operations for more than 22 and 27 days respectively, as at 30 June 2010.
Figure 3I shows that 57 per cent (50 of 87) of public hospitals had a high- or medium-risk assessment for cash holdings for 2010, with cash holdings that were equivalent to less than 30 days operating cash outflows. This includes 23 major metropolitan and regional public hospitals.
Of the metropolitan and regional hospitals with low cash holdings at 30 June 2010, most had other less liquid financial instruments to call upon in the event of a cash shortage.
Figure 3I Public hospital average number of days cash available assessment
43%49%49%44%48%
28% 29% 21% 22%16%
24% 27% 30% 29%41%
0
20
40
60
80
100
2005–06 2006–07 2007–08 2008–09 2009–10
Per cent
Low risk Medium risk High risk
Source: Victorian Auditor-General's Office.
3.4.4 Self-financing Figure 3J shows that the movements in the average self-financing indicator have been consistent for each of the three hospital categories. Rural hospitals have achieved a notably higher average self-financing indicator than both metropolitan hospitals and regional hospitals.
Financial sustainability
Victorian Auditor-General’s Report Acquittal Report Annex C: Public Hospitals 23
Figure 3J Average self-financing indicator by hospital category
0
2
4
6
8
10
12
2005–06 2006–07 2007–08 2008–09 2009–10
Per cent
Metropolitan Regional Rural
Source: Victorian Auditor-General's Office.
The 2010 average self-financing ratio was less than the minimum 10 per cent high-risk benchmark for all three categories, indicating hospitals cannot effectively replace their assets over the long term using income generated by their operations. Under these circumstances there is a greater reliance on the provision of additional government funding for asset renewal and replacement.
Figure 3K further illustrates that 86 per cent (75 of 87) of public hospitals have a high-risk self-financing assessment. This outcome is largely a consequence of the department’s capital funding model.
Figure 3K Public hospital self-financing risk assessment
10% 6% 5%2% 5%
26%20% 21% 14% 9%
86%80%74%78%64%
0
20
40
60
80
100
2005–06 2006–07 2007–08 2008–09 2009–10
Per cent
Low risk Medium risk High risk
Source: Victorian Auditor-General's Office.
Financial sustainability
24 Acquittal Report Annex C: Public Hospitals Victorian Auditor-General’s Report
3.4.5 Capital replacement Figure 3L shows that the capital replacement indicator has deteriorated across all public hospital categories over the five-year period. For the first time in five years, the average indicator has fallen below one for each hospital category, indicating that annual depreciation currently exceeds capital expenditure. Again the main driver behind this movement is the increased depreciation expense for 2009–10 following the revaluation of all hospitals’ property, plant and equipment in the 2009 financial year, particularly for buildings.
Caution is required when interpreting these results as annual spending on assets includes new and expanded facilities, in addition to existing facilities. As a result, the true level of underspending on renewing existing assets would be greater than Figure 3L and 3M suggest.
Figure 3L Average capital replacement indicator by category
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
2005–06 2006–07 2007–08 2008–09 2009–10
Metropolitan Regional Rural
Source: Victorian Auditor-General's Office
Figure 3M shows the number of hospitals with a high-risk capital replacement assessment has increased significantly in 2009–10. Although this indicator has been impacted by the upward valuation of hospital buildings, and the reassessment of their useful lives, it illustrates that spending on capital works is not sufficient to maintain and upgrade existing infrastructure and equipment, posing a risk to each hospital’s ability to keep up with the increasing demand for health services.
This outcome is consistent with that for the self-financing indicator, and is partly a consequence of the department’s capital funding model.
Financial sustainability
Victorian Auditor-General’s Report Acquittal Report Annex C: Public Hospitals 25
Figure 3M Public hospital capital replacement risk assessment
47% 47% 38% 38%15%
21% 17%23% 22%
11%
74%
40%39%36%32%
0
20
40
60
80
100
2005–06 2006–07 2007–08 2008–09 2009–10
Per cent
Low risk Medium risk High risk
Source: Victorian Auditor-General's Office.
3.5 Financial sustainability risk assessment A summary of the five-year average financial sustainability results for public hospitals is provided in Figure 3N, assessed by each category of public hospital.
Figure 3N 2009–10 overall financial sustainability risk assessment by category
Category High Medium Low Public hospitals Metropolitan 11 7 – Regional 8 7 – Rural 7 35 12 Total 26 49 12
Source: Victorian Auditor-General's Office.
Our financial sustainability assessment is that 26 public hospitals were high risk at 30 June 2010. These 26 public hospitals are spread across all three categories of public hospitals. This arises most commonly because they were assessed as generating insufficient cash to be able to adequately fund their operations. For these 26 public hospitals, short-term financial viability should be monitored and managed.
Financial sustainability
26 Acquittal Report Annex C: Public Hospitals Victorian Auditor-General’s Report
Alfred Health 0.24% 0.60 4.43 7.69% 2.84Austin Health -1.10% 0.92 6.37 5.75% 0.83Calvary Health Care Bethlehem 0.36% 0.29 3.34 3.67% 3.14Dental Health Services Victoria -1.33% 1.35 26.65 2.69% 0.83Eastern Health 1.40% 0.57 11.77 6.52% 2.98Melbourne Health 0.10% 0.74 3.45 5.01% 1.89Mercy Public Hospitals Inc. -0.68% 0.52 15.74 3.24% 1.83Northern Health -1.90% 0.40 3.21 3.77% 2.14Peninsula Health 0.12% 1.03 24.75 5.70% 2.07Peter MacCallum Cancer Centre 0.10% 1.68 35.63 7.08% 1.36Queen Elizabeth Centre -4.96% 1.70 89.25 3.26% 1.38Royal Children's Hospital 1.73% 1.66 11.51 7.93% 1.55Royal Victorian Eye and Ear Hospital 0.94% 0.85 22.34 9.68% 0.98Royal Women's Hospital -4.87% 0.36 2.14 1.43% 0.43Southern Health -0.60% 0.66 16.70 4.12% 1.58St. Vincent's Hospital (Melbourne) Limited 1.30% 1.11 14.33 6.12% 2.59Tweddle Child & Family Health Service 3.88% 3.33 63.59 7.80% 1.39Western Health 2.76% 0.78 27.64 7.70% 1.84Metropolitan hospital average -0.14% 1.03 21.27 5.51% 1.76Metropolitan hospital risk assessment Medium Low Medium High Low Medium
Capital replacement
Overall sustainabilityMetropolitan hospitals
Underlying result (%) Liquidity
Average number of days cash available Self-financing
3.5.1 Metropolitan hospitals The overall financial sustainability for the metropolitan hospitals has been assessed as medium risk in Figure 3O.
Figure 3O Metropolitan hospitals—five-year average
financial sustainability risk assessment 2006 to 2010
Source: Victorian Auditor-General's Office.
Although the overall financial sustainability assessment for metropolitan hospitals is medium risk over the five-year period, it is noted that 11 of the 18 metropolitan hospitals have been assessed as high risk. This has been driven by these hospitals having insufficient cash available to finance operational expenditure in the short term.
Seven metropolitan hospitals had a liquidity ratio of less than 0.7, with the average liquidity ratio for all metropolitan hospitals showing current assets in excess of current liabilities. All metropolitan hospitals had a high-risk self-financing indicator of below 10 per cent.
Financial sustainability
Victorian Auditor-General’s Report Acquittal Report Annex C: Public Hospitals 27
3.5.2 Regional hospitals The overall financial sustainability for the regional hospitals has been assessed as medium risk in Figure 3P.
Figure 3P Regional hospitals—five-year average
financial sustainability risk assessment 2006 to 2010
Source: Victorian Auditor-General's Office.
Similar to metropolitan hospitals, over half of the regional hospitals have been assessed as high risk, again driven by the number of days cash available for operations indicator.
No regional hospital has been assessed as, on average, having a high-risk underlying result indicator, although all regional hospitals have been assessed as having a high-risk self-financing ratio.
Albury Wodonga Health -0.27% 0.68 18.21 4.90% 1.03Bairnsdale Regional Health Service 3.11% 1.41 47.21 8.24% 1.38Ballarat Health Services -1.47% 0.47 5.38 5.89% 1.89Barwon Health 0.61% 0.87 12.26 6.63% 2.71Bendigo Health Care Group -0.88% 0.72 13.20 5.94% 1.28Central Gippsland Health Service -0.91% 0.78 16.64 4.84% 0.76Echuca Regional Health 3.06% 0.92 10.98 8.88% 1.79Goulburn Valley Health 0.07% 0.75 11.87 5.28% 1.90Latrobe Regional Hospital -0.24% 0.85 18.52 4.87% 2.41Northeast Health Wangaratta -2.57% 0.88 3.38 2.37% 1.44South West Healthcare 1.88% 1.13 31.24 6.45% 2.45Swan Hill District Hospital -1.32% 1.87 86.50 5.19% 0.86West Gippsland Healthcare Group 0.39% 1.09 54.54 7.44% 1.71Western District Health Service 0.86% 2.28 39.37 6.80% 1.08Wimmera Health Care Group -2.86% 0.77 8.42 2.35% 0.79Regional hospital average -0.04% 1.03 25.18 5.74% 1.56Regional hospital risk assessment Medium Low Medium High Low Medium
Average number of days cash available Self-financing
Overall sustainabilityRegional hospitals
Underlying result (%) Liquidity
Capital replacement
Financial sustainability
28 Acquittal Report Annex C: Public Hospitals Victorian Auditor-General’s Report
3.5.3 Rural hospitals The overall financial sustainability for the rural hospitals has been assessed as medium risk in Figure 3Q.
Figure 3Q Rural hospitals—five-year average
financial sustainability risk assessment 2006 to 2010
Source: Victorian Auditor-General's Office.
Alexandra District Hospital 14.42% 6.13 45.84 21.14% 1.77Alpine Health -4.19% 0.58 27.49 3.46% 0.49Bass Coast Regional Health -1.92% 0.88 20.97 3.28% 1.07Beaufort & Skipton Health Services -3.76% 2.17 57.96 4.44% 3.41Beechworth Health Service -5.95% 1.41 35.73 2.47% 0.55Benalla and District Memorial Hospital 0.80% 2.97 51.60 8.18% 1.50Boort District Hospital -0.14% 1.71 52.46 5.78% 1.16Casterton Memorial Hospital -0.52% 1.08 79.34 7.58% 0.46Castlemaine Health -3.28% 1.07 43.97 4.38% 2.11Cobram District Hospital 0.23% 2.04 31.57 7.45% 1.37Cohuna District Hospital -2.70% 1.75 48.68 4.12% 0.64Colac Area Health 2.62% 0.63 14.54 8.35% 2.38Djerriwarrh Health Services 6.60% 0.84 8.36 6.98% 1.51Dunmunkle Health Services 4.96% 1.03 15.56 9.68% 2.97East Grampians Health Service -1.48% 1.33 47.09 5.63% 2.50East Wimmera Health Service -4.72% 1.66 27.44 3.38% 0.91Edenhope and District Hospital -0.09% 1.81 131.29 6.89% 1.09Gippsland Southern Health Service 1.75% 3.24 6.00 9.55% 2.59Heathcote Health -6.22% 4.29 31.16 1.54% 1.04Hepburn Health Service 1.54% 1.91 40.20 7.74% 1.53Hesse Rural Health Service 7.87% 0.68 49.23 13.94% 4.27Heywood Rural Health -1.98% 1.12 47.85 5.44% 0.65Inglewood and District Health Service -2.35% 1.39 24.17 6.91% 1.15Kerang District Health -1.67% 1.56 37.01 5.76% 0.55Kilmore and District Hospital -4.06% 1.47 21.07 3.29% 0.85Kooweerup Regional Health Service 11.26% 1.31 16.36 18.07% 2.34Kyabram and District Health Services 4.37% 2.64 22.05 6.57% 1.76Kyneton District Health Service -3.19% 0.83 12.36 5.88% 1.45
Average number of days cash available
Capital replacement
Overall sustainabilitySelf-financingRural hospitals
Underlying result (%) Liquidity
Financial sustainability
Victorian Auditor-General’s Report Acquittal Report Annex C: Public Hospitals 29
Figure 3Q Rural hospitals—five-year average
financial sustainability risk assessment 2006 to 2010 – continued
Source: Victorian Auditor-General's Office.
Thirty-five of the 54 rural hospitals have been assessed as medium risk over the five-year period from 2006 to 2010. On average, rural hospitals have a much higher liquidity ratio than metropolitan and regional hospitals, demonstrating that they hold almost twice as many current assets than current liabilities.
Rural hospitals also have a much higher average number of days cash indicator than the metropolitan and regional hospitals, averaging 48 days over the five-year period. This reflects the fact that rural hospitals maintain a greater amount of their excess cash in a more liquid form, essentially due to relatively lower cash and cash equivalents controlled by these public hospitals compared to larger hospitals. Smaller cash holdings restrict the potential for rural hospitals to obtain higher investment returns from longer-term investments thereby reducing the incentive for such investments.
Eleven rural hospitals have been assessed as low risk overall, with seven given a high-risk assessment due to either a high-risk number of days cash available for operations indicator or a high-risk liquidity indicator.
Lorne Community Hospital -0.36% 2.08 80.27 12.43% 1.43Maldon Hospital 2.36% 2.28 61.29 9.58% 0.59Mallee Track Health and Community Services 0.59% 4.63 39.70 10.29% 1.21Mansfield District Hospital -3.17% 0.74 7.45 4.60% 0.93Maryborough District Health Service 5.24% 1.99 40.01 11.48% 2.54Moyne Health Services 2.49% 1.02 63.28 12.33% 1.76Nathalia District Hospital 7.59% 2.53 53.86 13.86% 18.26Numurkah District Health Service 4.25% 1.50 99.27 11.04% 0.90Omeo District Health -4.94% 1.53 63.93 7.13% 1.25Orbost Regional Health 0.04% 1.85 88.45 7.67% 1.00Otway Health & Community Services 5.70% 1.45 20.89 10.62% 1.35Portland District Health -4.22% 0.82 18.62 2.96% 1.59Robinvale District Health Services 1.75% 2.15 89.63 9.18% 2.58Rochester and Elmore District Health Service 20.75% 1.12 80.74 26.07% 7.12Rural Northwest Health 12.29% 1.66 88.07 18.45% 7.72Seymour District Memorial Hospital 3.22% 3.62 27.27 10.31% 4.09South Gippsland Hospital 0.34% 3.48 97.52 7.67% 1.74Stawell Regional Health -1.53% 1.36 27.70 5.31% 1.29Tallangatta Health Service -3.29% 1.34 82.01 6.23% 0.68Terang and Mortlake Health Service 1.23% 2.39 25.59 6.75% 1.56Timboon and District Healthcare Service 16.72% 11.05 80.39 24.15% 0.99Upper Murray Health & Community Services 4.66% 1.17 64.01 10.18% 2.37West Wimmera Health Service 2.33% 1.01 53.12 10.14% 0.59Yarram & District Health Service 0.44% 1.97 127.88 9.76% 0.99Yarrawonga District Health Service -5.64% 1.07 20.19 5.04% 4.10Yea & District Memorial Hospital -1.13% 2.19 58.95 10.63% 0.72Rural hospital average 1.41% 1.99 48.29 8.74% 2.10Rural hospital risk assessment Low Low Low High Low Medium
Self-financingCapital
replacement Overall
sustainabilityRural hospitals Underlying
result (%) LiquidityAverage number of days cash available
Victorian Auditor-General’s Report Acquittal Report Annex C: Public Hospitals 31
Appendix A. Audit status
32 Acquittal Report Annex C: Public Hospitals Victorian Auditor-General’s Office
Appendix A. Audit status
Met
ropo
litan
hos
pita
ls a
nd a
ssoc
iate
d en
titie
s
Aud
it ty
pes
Fi
nanc
ial s
tate
men
ts
Fi
nalis
ed w
ithin
sta
tuto
ry
time
fram
e
Entit
y FM
A
Non
-FM
A
Cle
ar o
pini
on
issu
ed
Aud
itor-
Gen
eral
’s
repo
rt s
igne
d M
et
Not
met
C
OM
PLET
ED A
UD
ITS
WIT
H 3
0 JU
NE
2010
BA
LAN
CE
DAT
ES
Alfr
ed H
ealth
11 A
ug 2
010
Aus
tin H
ealth
12 A
ug 2
010
Cal
vary
Hea
lth C
are
Bet
hleh
em L
td
C
19 A
ug 2
010
Den
tal H
ealth
Ser
vice
s Vi
ctor
ia
19
Aug
201
0
Eas
tern
Hea
lth
11
Aug
201
0
Mel
bour
ne H
ealth
09 A
ug 2
010
Evi
var M
edic
al P
ty L
td
C
06 A
ug 2
010
Roy
al M
elbo
urne
Hos
pita
l Fou
ndat
ion
Ltd
C
06 A
ug 2
010
Mer
cy P
ublic
Hos
pita
ls In
c.
30
Aug
201
0
Nor
ther
n H
ealth
17 A
ug 2
010
Nor
ther
n H
ealth
Res
earc
h, T
rain
ing
and
Equ
ipm
ent
Foun
datio
n Li
mite
d
C
30
Jul
201
0
Nor
ther
n H
ealth
Res
earc
h, T
rain
ing
and
Equ
ipm
ent
Foun
datio
n Tr
ust
O
30 J
ul 2
010
N/A
Par
kvill
e C
ompr
ehen
sive
Can
cer C
entre
Lim
ited
C
15 O
ct 2
010
Par
kvill
e C
ompr
ehen
sive
Can
cer C
entre
Joi
nt V
entu
re
C
15 O
ct 2
010
Peni
nsul
a H
ealth
20 A
ug 2
010
Pet
er M
acC
allu
m C
ance
r Cen
tre
13
Aug
201
0
Cel
l The
rapi
es P
ty L
td
C
12 A
ug 2
010
Pet
er M
acC
allu
m C
ance
r Fou
ndat
ion
16 A
ug 2
010
Pet
er M
acC
allu
m C
ance
r Fou
ndat
ion
Ltd
C
16 A
ug 2
010
Victorian Auditor-General’s Report Acquittal Report Annex C: Public Hospitals 33
Appendix A. Audit status
A
udit
type
s
Fina
ncia
l sta
tem
ents
Fina
lised
with
in s
tatu
tory
tim
e fr
ame
Entit
y FM
A
Non
-FM
A
Cle
ar o
pini
on
issu
ed
Aud
itor-
Gen
eral
’s
repo
rt s
igne
d M
et
Not
met
C
OM
PLET
ED A
UD
ITS
WIT
H 3
0 JU
NE
2010
BA
LAN
CE
DAT
ES –
con
tinue
d Q
ueen
Eliz
abet
h C
entre
19 A
ug 2
010
Roy
al C
hild
ren’
s H
ospi
tal
24
Aug
201
0
Com
mun
ities
Tha
t Car
e Li
mite
d
C
26
Jul
201
0
Roy
al C
hild
ren’
s H
ospi
tal E
duca
tion
Inst
itute
Ltd
C
12
Aug
201
0
Roy
al C
hild
ren’
s H
ospi
tal F
ound
atio
n Tr
ust F
unds
O
30
Aug
201
0 N
/A
Roy
al V
icto
rian
Eye
and
Ear
Hos
pita
l
25 A
ug 2
010
Roy
al W
omen
’s H
ospi
tal
30
Aug
201
0
Roy
al W
omen
’s H
ospi
tal F
ound
atio
n Li
mite
d
C
10
Sep
201
0
Roy
al W
omen
’s H
ospi
tal T
rust
Fun
ds
O
10 S
ep 2
010
N/A
Sout
hern
Hea
lth
11
Aug
201
0
Kita
ya H
oldi
ngs
Pty
Ltd
C
11
Aug
201
0
St. V
ince
nt’s
Hos
pita
l (M
elbo
urne
) Lim
ited
C
27 A
ug 2
010
Twed
dle
Chi
ld a
nd F
amily
Hea
lth S
ervi
ce
26
Aug
201
0
Wes
tern
Hea
lth
18
Aug
201
0
2009
–10
Tota
l num
ber o
f ent
ities
= 3
3 17
16
33
0
Per c
ent
100
0 20
08–0
9 To
tal n
umbe
r of e
ntiti
es =
32
17
15
25
7
Pe
r cen
t 78
22
N
ote:
Non
-FM
A au
dit t
ypes
: A –
Ass
ocia
tions
Inco
rpor
atio
n A
ct 1
981,
C –
Cor
pora
tions
Act
200
1 an
d O
– o
ther
repo
rting
fram
ewor
k.
N/A
= P
repa
re fi
nanc
ial s
tate
men
ts in
acc
orda
nce
with
oth
er re
porti
ng fr
amew
ork.
No
stat
utor
y tim
e fra
me.
S
ourc
e: V
icto
rian
Audi
tor-G
ener
al's
Offi
ce.
34 Acquittal Report Annex C: Public Hospitals Victorian Auditor-General’s Office
Appendix A. Audit status
Reg
iona
l hos
pita
ls a
nd a
ssoc
iate
d en
titie
s
Aud
it ty
pes
Fi
nanc
ial s
tate
men
ts
Fi
nalis
ed w
ithin
sta
tuto
ry
time
fram
e
Entit
y FM
A
Non
-FM
A
Cle
ar o
pini
on
issu
ed
Aud
itor-
Gen
eral
’s
repo
rt s
igne
d M
et
Not
met
C
OM
PLET
ED A
UD
ITS
WIT
H 3
0 JU
NE
2010
BA
LAN
CE
DAT
ES
Albu
ry W
odon
ga H
ealth
(a)
30
Aug
201
0
Bairn
sdal
e R
egio
nal H
ealth
Ser
vice
25 A
ug 2
010
Bal
lara
t Hea
lth S
ervi
ces
06
Aug
201
0
Bar
won
Hea
lth
06
Aug
201
0
Ben
digo
Hea
lth C
are
Gro
up
25
Aug
201
0
Cen
tral G
ipps
land
Hea
lth S
ervi
ce
25
Aug
201
0
Echu
ca R
egio
nal H
ealth
26 A
ug 2
010
Ech
uca
Reg
iona
l Hea
lth F
ound
atio
n Tr
ust F
und
O
26 A
ug 2
010
N/A
Ech
uca
Reg
iona
l Hea
lth F
ound
atio
n Li
mite
d
C
26
Aug
201
0
Gou
lbur
n Va
lley
Hea
lth
26
Aug
201
0
Latro
be R
egio
nal H
ospi
tal
23
Aug
201
0
Nor
thea
st H
ealth
Wan
gara
tta
24
Aug
201
0
Sou
th W
est H
ealth
care
24 A
ug 2
010
Sw
an H
ill D
istri
ct H
ospi
tal
26
Aug
201
0
Wes
t Gip
psla
nd H
ealth
care
Gro
up
27
Aug
201
0
Wes
tern
Dis
trict
Hea
lth S
ervi
ce
18
Aug
201
0
Wim
mer
a H
ealth
Car
e G
roup
25 A
ug 2
010
2009
–10
Tota
l num
ber o
f ent
ities
= 1
7 15
2
17
0
Pe
r cen
t 10
0 0
2008
–09
Tota
l num
ber o
f ent
ities
= 1
7 15
2
17
0
Pe
r cen
t 10
0 0
Not
e: N
on-F
MA
audi
t typ
es: A
– A
ssoc
iatio
ns In
corp
orat
ion
Act
198
1, C
– C
orpo
ratio
ns A
ct 2
001
and
O –
oth
er re
porti
ng fr
amew
ork.
N
/A =
Pre
pare
fina
ncia
l sta
tem
ents
in a
ccor
danc
e w
ith o
ther
repo
rting
fram
ewor
k. N
o st
atut
ory
time
fram
e.
(a) W
odon
ga R
egio
nal H
ealth
Ser
vice
mer
ged
with
Alb
ury
Bas
e H
ospi
tal o
n 1
July
200
9 to
form
Alb
ury
Wod
onga
Hea
lth.
Sou
rce:
Vic
toria
n Au
dito
r-Gen
eral
's O
ffice
.
Victorian Auditor-General’s Report Acquittal Report Annex C: Public Hospitals 35
Appendix A. Audit status
Rur
al h
ospi
tals
and
ass
ocia
ted
entit
ies
A
udit
type
s
Fina
ncia
l sta
tem
ents
Fina
lised
with
in s
tatu
tory
tim
e fr
ame
Entit
y FM
A
Non
-FM
A
Cle
ar o
pini
on
issu
ed
Aud
itor-
Gen
eral
’s
repo
rt s
igne
d M
et
Not
met
C
OM
PLET
ED A
UD
ITS
WIT
H 3
0 JU
NE
2010
BA
LAN
CE
DAT
ES
Ale
xand
ra D
istri
ct H
ospi
tal
23
Aug
201
0
Alpi
ne H
ealth
06 S
ep 2
010
Bas
s C
oast
Reg
iona
l Hea
lth
30
Aug
201
0
Bea
ufor
t and
Ski
pton
Hea
lth S
ervi
ce
06
Sep
201
0
Bea
ufor
t and
Ski
pton
Hea
lth S
ervi
ces
Foun
datio
n Lt
d
C
08
Sep
201
0
Bee
chw
orth
Hea
lth S
ervi
ce
26
Aug
201
0
Ben
alla
and
Dis
trict
Mem
oria
l Hos
pita
l
19 A
ug 2
010
Boo
rt D
istri
ct H
ospi
tal
27
Aug
201
0
Cas
terto
n M
emor
ial H
ospi
tal
19
Aug
201
0
Cas
tlem
aine
Hea
lth( a
)
31 A
ug 2
010
Cob
ram
Dis
trict
Hea
lth
30
Aug
201
0
Cob
ram
Dis
trict
Hea
lth S
ervi
ces
Foun
datio
n
O
27
Aug
201
0 N
/A
Coh
una
Dis
trict
Hos
pita
l
25 A
ug 2
010
Coh
una
Com
mun
ity N
ursi
ng H
ome
Inc.
25 A
ug 2
010
Col
ac A
rea
Hea
lth
27
Aug
201
0
Dje
rriw
arrh
Hea
lth S
ervi
ces
27
Aug
201
0
Dun
mun
kle
Hea
lth S
ervi
ces
20
Aug
201
0
Eas
t Gra
mpi
ans
Hea
lth S
ervi
ce
25
Aug
201
0
Eas
t Gra
mpi
ans
Bui
ldin
g fo
r the
Fut
ure
Foun
datio
n
25 A
ug 2
010
Eas
t Wim
mer
a H
ealth
Ser
vice
19 A
ug 2
010
Eden
hope
and
Dis
trict
Mem
oria
l Hos
pita
l
30 A
ug 2
010
Gip
psla
nd S
outh
ern
Hea
lth S
ervi
ce
30
Aug
201
0
36 Acquittal Report Annex C: Public Hospitals Victorian Auditor-General’s Office
Appendix A. Audit status
Rur
al h
ospi
tals
and
ass
ocia
ted
entit
ies
– co
ntin
ued
A
udit
type
s
Fina
ncia
l sta
tem
ents
Fina
lised
with
in s
tatu
tory
tim
e fr
ame
Entit
y FM
A
Non
-FM
A
Cle
ar o
pini
on
issu
ed
Aud
itor-
Gen
eral
’s
repo
rt s
igne
d M
et
Not
met
C
OM
PLET
ED A
UD
ITS
WIT
H 3
0 JU
NE
2010
BA
LAN
CE
DAT
ES –
con
tinue
d
Hea
thco
te H
ealth
(b)
20
Aug
201
0
Hep
burn
Hea
lth S
ervi
ce
26
Aug
201
0
Hes
se R
ural
Hea
lth S
ervi
ce
16
Aug
201
0
Win
chel
sea
Hos
tel a
nd N
ursi
ng H
ome
Soc
iety
O
25
Aug
200
9 N
/A
Hey
woo
d R
ural
Hea
lth
24
Aug
201
0
Ingl
ewoo
d an
d D
istri
cts
Hea
lth S
ervi
ce
27
Aug
201
0
Ker
ang
Dis
trict
Hea
lth
02
Sep
201
0
Kilm
ore
and
Dis
trict
Hos
pita
l
24 A
ug 2
010
Koow
eeru
p R
egio
nal H
ealth
Ser
vice
30 A
ug 2
010
Kya
bram
and
Dis
trict
Hea
lth S
ervi
ce
30
Aug
201
0
Kyn
eton
Dis
trict
Hea
lth S
ervi
ce
30
Aug
201
0
LMH
A N
etw
ork
Lim
ited
C
15 N
ov 2
010
Lorn
e C
omm
unity
Hos
pita
l
25 A
ug 2
010
Mal
don
Hos
pita
l
31 A
ug 2
010
Mal
lee
Trac
k H
ealth
and
Com
mun
ity S
ervi
ce
30
Aug
201
0
Man
sfie
ld D
istri
ct H
ospi
tal
26
Aug
201
0
Mar
ybor
ough
Dis
trict
Hea
lth S
ervi
ce
26
Aug
201
0
Moy
ne H
ealth
Ser
vice
s
19 A
ug 2
010
Moy
ne H
ealth
Ser
vice
s In
c.
A
19 A
ug 2
010
N/A
Nat
halia
Dis
trict
Hos
pita
l
25 A
ug 2
010
Num
urka
h D
istri
ct H
ealth
Ser
vice
27 A
ug 2
010
Om
eo D
istri
ct H
ospi
tal
27
Aug
201
0
Orb
ost R
egio
nal H
ealth
25 A
ug 2
010
Victorian Auditor-General’s Report Acquittal Report Annex C: Public Hospitals 37
Appendix A. Audit status
A
udit
type
s
Fina
ncia
l sta
tem
ents
Fina
lised
with
in s
tatu
tory
tim
e fr
ame
Entit
y FM
A
Non
-FM
A
Cle
ar o
pini
on
issu
ed
Aud
itor-
Gen
eral
’s
repo
rt s
igne
d M
et
Not
met
C
OM
PLET
ED A
UD
ITS
WIT
H 3
0 JU
NE
2010
BA
LAN
CE
DAT
ES –
con
tinue
d O
tway
Hea
lth a
nd C
omm
unity
Ser
vice
s
26 A
ug 2
010
Por
tland
Dis
trict
Hea
lth
20
Aug
201
0
Rob
inva
le D
istri
ct H
ealth
Ser
vice
s
25 A
ug 2
010
Roc
hest
er a
nd E
lmor
e D
istri
ct H
ealth
Ser
vice
26 A
ug 2
010
Rur
al N
orth
wes
t Hea
lth
30
Aug
201
0
Sey
mou
r Dis
trict
Mem
oria
l Hos
pita
l
01 S
ep 2
010
Sout
h G
ipps
land
Hos
pita
l
30 A
ug 2
010
Staw
ell R
egio
nal H
ealth
26 A
ug 2
010
Staw
ell D
istri
ct H
ospi
tal F
ound
atio
n
26 A
ug 2
010
Talla
ngat
ta H
ealth
Ser
vice
26 A
ug 2
010
Tera
ng a
nd M
ortla
ke H
ealth
Ser
vice
23 A
ug 2
010
Tim
boon
and
Dis
trict
Hea
lthca
re S
ervi
ce
19
Aug
201
0
Upp
er M
urra
y H
ealth
and
Com
mun
ity S
ervi
ces
26
Aug
201
0
Wes
t Wim
mer
a H
ealth
Ser
vice
16 A
ug 2
010
Yarra
m a
nd D
istri
ct H
ealth
Ser
vice
23 A
ug 2
010
Yarra
won
ga D
istri
ct H
ealth
Ser
vice
25 A
ug 2
010
Yea
and
Dis
trict
Mem
oria
l Hos
pita
l
25 A
ug 2
010
2009
–10
Tota
l num
ber o
f ent
ities
= 6
2 57
5
61
1
Pe
r cen
t 98
2
2008
–09
Tota
l num
ber o
f ent
ities
= 6
5 59
6
57
8
Pe
r cen
t 88
12
N
ote:
Non
FM
A au
dit t
ypes
: A –
Ass
ocia
tions
Inco
rpor
atio
n A
ct 1
981,
C –
Cor
pora
tions
Act
200
1 an
d O
– o
ther
repo
rting
fram
ewor
k.
N/A
= P
repa
re fi
nanc
ial s
tate
men
ts in
acc
orda
nce
with
oth
er re
porti
ng fr
amew
ork.
No
stat
utor
y tim
e fra
me.
(a
) Pre
viou
sly
know
n as
Mt.
Ale
xand
er H
ospi
tal.
(b) P
revi
ousl
y kn
own
as M
cIvo
r Hea
lth a
nd C
omm
unity
Ser
vice
s.
Sou
rce:
Vic
toria
n Au
dito
r-Gen
eral
's O
ffice
.
Victorian Auditor-General’s Report Acquittal Report Annex C: Public Hospitals 39
Appendix B. Financial sustainability
Appendix B. Financial sustainability
40 Acquittal Report Annex C: Public Hospitals Victorian Auditor-General’s Report
Metropolitan hospitals
Figure B1 Underlying result (%) 2006 to 2010
2006 2007 2008 2009 2010 Mean TrendAlfred Health 2.45% -0.10% 2.59% 0.12% -3.87% 0.24%
Austin Health -0.79% -2.26% -1.71% 2.49% -3.20% -1.10%
Calvary Health Care Bethlehem -6.86% 0.99% 4.95% 1.34% 1.38% 0.36%
Dental Health Services Victoria 2.09% -0.23% -7.28% 0.10% -1.32% -1.33%
Eastern Health 1.53% 1.64% 8.18% -0.10% -4.26% 1.40%
Melbourne Health 1.29% -1.60% 2.50% 2.89% -4.55% 0.10%
Mercy Public Hospitals Inc. -1.01% -1.39% 0.66% 0.44% -2.09% -0.68%
Northern Health -1.01% 1.66% -5.46% -5.71% 1.03% -1.90%
Peninsula Health -1.11% -1.39% -2.27% 1.04% 4.32% 0.12%
Peter MacCallum Cancer Centre 3.01% 1.21% -0.56% -1.76% -1.38% 0.10%
Queen Elizabeth Centre -1.53% -4.61% -12.43% -4.94% -1.27% -4.96%
Royal Children's Hospital 6.04% 2.72% 2.41% -2.25% -0.28% 1.73%
Royal Victorian Eye and Ear Hospital 7.76% 3.93% 0.75% -6.55% -1.20% 0.94%
Royal Women's Hospital -2.03% -4.66% -0.49% -9.22% -7.94% -4.87%
Southern Health 0.29% -0.76% 0.40% -0.40% -2.52% -0.60%
St. Vincent's Hospital (Melbourne) Limited 0.50% 0.00% 1.04% 2.02% 2.92% 1.30%
Tweddle Child & Family Health Service 0.37% 8.33% -1.07% 9.70% 2.09% 3.88%
Western Health 1.43% -2.95% 5.11% 4.54% 5.66% 2.76%
Metropolitan hospital average 0.69% 0.03% -0.15% -0.35% -0.92% -0.14%
Underlying result %
Metropolitan hospitals
Source: Victorian Auditor-General’s Office.
Appendix B. Financial sustainability
Victorian Auditor-General’s Report Acquittal Report Annex C: Public Hospitals 41
Figure B2 Liquidity 2006 to 2010
2006 2007 2008 2009 2010 Mean TrendAlfred Health 0.88 0.64 0.64 0.39 0.44 0.60
Austin Health 0.71 0.78 1.03 1.07 1.03 0.92
Calvary Health Care Bethlehem 0.47 0.23 0.33 0.15 0.26 0.29
Dental Health Services Victoria 1.99 0.79 0.56 1.73 1.70 1.35
Eastern Health 0.50 0.53 0.69 0.57 0.57 0.57
Melbourne Health 0.78 0.60 0.78 0.83 0.72 0.74
Mercy Public Hospitals Inc. 0.64 0.57 0.61 0.51 0.25 0.52
Northern Health 0.59 0.50 0.35 0.32 0.22 0.40
Peninsula Health 1.02 0.98 1.08 1.16 0.90 1.03
Peter MacCallum Cancer Centre 1.94 1.63 1.74 1.49 1.63 1.68
Queen Elizabeth Centre 2.14 0.94 2.20 1.65 1.56 1.70
Royal Children's Hospital 1.82 1.40 1.57 1.68 1.85 1.66
Royal Victorian Eye and Ear Hospital 0.79 0.69 0.95 0.87 0.93 0.85
Royal Women's Hospital 0.45 0.30 0.46 0.32 0.28 0.36
Southern Health 0.79 0.73 0.76 0.59 0.41 0.66
St. Vincent's Hospital (Melbourne) Limited 1.08 1.02 1.35 1.14 0.96 1.11
Tweddle Child & Family Health Service 2.20 3.49 2.25 4.16 4.56 3.33
Western Health 0.55 0.40 0.84 0.91 1.22 0.78
Metropolitan hospital average 1.07 0.90 1.01 1.08 1.08 1.03
Liquidity
Metropolitan hospitals
Source: Victorian Auditor-General’s Office.
Appendix B. Financial sustainability
42 Acquittal Report Annex C: Public Hospitals Victorian Auditor-General’s Report
Figure B3 Average number of days cash available 2006 to 2010
2006 2007 2008 2009 2010 Mean TrendAlfred Health 12.17 5.66 1.44 1.78 1.08 4.43
Austin Health 2.33 7.56 10.36 8.84 2.78 6.37
Calvary Health Care Bethlehem 6.14 4.59 4.66 0.00 1.31 3.34
Dental Health Services Victoria 53.72 15.32 5.76 21.05 37.41 26.65
Eastern Health 1.51 13.48 20.29 12.05 11.55 11.77
Melbourne Health 7.72 3.06 0.64 4.68 1.16 3.45
Mercy Public Hospitals Inc. 25.26 20.52 15.25 17.45 0.24 15.74
Northern Health 15.68 0.00 0.35 0.00 0.00 3.21
Peninsula Health 27.82 23.79 24.10 34.74 13.29 24.75
Peter MacCallum Cancer Centre 51.58 31.06 40.17 26.22 29.15 35.63
Queen Elizabeth Centre 104.77 42.51 9.43 136.71 152.81 89.25
Royal Children's Hospital 5.43 16.63 16.59 9.74 9.17 11.51
Royal Victorian Eye and Ear Hospital 9.78 7.40 30.14 35.59 28.80 22.34
Royal Women's Hospital 3.34 2.03 1.73 1.72 1.86 2.14
Southern Health 28.89 19.72 21.20 12.71 0.99 16.70
St. Vincent's Hospital (Melbourne) Limited 17.31 7.57 13.98 19.23 13.56 14.33
Tweddle Child & Family Health Service 38.55 88.96 76.69 58.34 55.41 63.59
Western Health 17.77 6.59 36.55 34.03 43.27 27.64
Metropolitan hospital average 23.87 17.58 18.30 24.16 22.43 21.27
Average number of days cash available
Metropolitan hospitals
Source: Victorian Auditor-General’s Office.
Appendix B. Financial sustainability
Victorian Auditor-General’s Report Acquittal Report Annex C: Public Hospitals 43
Figure B4 Self-financing (%) 2006 to 2010
2006 2007 2008 2009 2010 Mean TrendAlfred Health 8.77% 3.18% 10.33% 7.94% 8.24% 7.69%
Austin Health 7.11% 3.17% 5.62% 7.73% 5.12% 5.75%
Calvary Health Care Bethlehem 1.00% 2.56% 10.96% 2.66% 1.20% 3.67%
Dental Health Services Victoria 5.06% 3.91% -2.34% 0.79% 6.01% 2.69%
Eastern Health 5.71% 7.10% 11.93% 4.66% 3.18% 6.52%
Melbourne Health 4.22% 4.66% 3.88% 9.18% 3.14% 5.01%
Mercy Public Hospitals Inc. 10.55% 1.80% 1.18% 4.38% -1.71% 3.24%
Northern Health 4.42% 2.99% 3.14% 1.83% 6.47% 3.77%
Peninsula Health 5.51% 4.06% 2.56% 8.63% 7.76% 5.70%
Peter MacCallum Cancer Centre 10.26% 7.91% 5.82% 5.05% 6.37% 7.08%
Queen Elizabeth Centre 5.83% 2.49% -10.22% 9.76% 8.45% 3.26%
Royal Children's Hospital 7.68% 11.91% 8.45% 9.56% 2.07% 7.93%
Royal Victorian Eye and Ear Hospital 11.23% 11.00% 12.16% 9.04% 4.95% 9.68%
Royal Women's Hospital 1.32% 2.00% 2.78% 1.42% -0.38% 1.43%
Southern Health 6.50% 2.27% 4.61% 3.87% 3.35% 4.12%
St. Vincent's Hospital (Melbourne) Limited 9.94% 1.84% 7.70% 4.12% 7.00% 6.12%
Tweddle Child & Family Health Service 9.71% 5.37% 14.71% 4.18% 5.02% 7.80%
Western Health 6.07% 3.08% 9.24% 7.18% 12.91% 7.70%
Metropolitan hospital average 6.72% 4.52% 5.69% 5.67% 4.95% 5.51%
Metropolitan hospitals
Self-financing %
Source: Victorian Auditor-General’s Office.
Appendix B. Financial sustainability
44 Acquittal Report Annex C: Public Hospitals Victorian Auditor-General’s Report
Figure B5 Capital replacement 2006 to 2010
2006 2007 2008 2009 2010 Mean TrendAlfred Health 3.33 3.62 3.06 3.15 1.03 2.84
Austin Health 0.67 0.65 1.13 1.22 0.47 0.83
Calvary Health Care Bethlehem 6.88 1.10 3.11 3.37 1.27 3.14
Dental Health Services Victoria 0.92 1.22 0.43 0.96 0.64 0.83
Eastern Health 2.18 5.15 4.64 2.30 0.62 2.98
Melbourne Health 1.92 2.71 1.89 2.21 0.70 1.89
Mercy Public Hospitals Inc. 3.40 0.51 1.77 2.04 1.42 1.83
Northern Health 3.01 3.99 0.66 1.70 1.36 2.14
Peninsula Health 1.03 2.22 1.48 2.61 3.03 2.07
Peter MacCallum Cancer Centre 1.58 1.96 0.75 1.71 0.78 1.36
Queen Elizabeth Centre 1.55 2.98 1.15 0.33 0.89 1.38
Royal Children's Hospital 4.01 2.10 1.07 0.27 0.28 1.55
Royal Victorian Eye and Ear Hospital 1.39 1.34 0.79 0.92 0.44 0.98
Royal Women's Hospital 0.44 0.84 0.59 0.21 0.07 0.43
Southern Health 1.50 1.55 1.68 1.90 1.27 1.58
St. Vincent's Hospital (Melbourne) Limited 2.44 2.00 3.73 1.95 2.81 2.59
Tweddle Child & Family Health Service 0.23 0.21 3.94 0.86 1.72 1.39
Western Health 1.86 1.51 1.56 2.72 1.57 1.84
Metropolitan hospital average 2.13 1.98 1.86 1.69 1.13 1.76
Capital replacement
Metropolitan hospitals
Source: Victorian Auditor-General’s Office.
Appendix B. Financial sustainability
Victorian Auditor-General’s Report Acquittal Report Annex C: Public Hospitals 45
Regional hospitals
Figure B6 Underlying result (%) 2006 to 2010
2006 2007 2008 2009 2010 Mean TrendAlbury Wodonga Health -0.68% -1.46% -0.92% 1.60% 0.11% -0.27%
Bairnsdale Regional Health Service 3.17% 7.57% 5.07% 2.60% -2.84% 3.11%
Ballarat Health Services -0.57% -0.39% -0.19% -3.86% -2.37% -1.47%
Barwon Health 2.57% -0.24% 1.00% 1.71% -2.02% 0.61%
Bendigo Health Care Group -2.65% -1.90% -1.10% -0.71% 1.94% -0.88%
Central Gippsland Health Service 2.57% 1.58% -2.02% -0.68% -6.01% -0.91%
Echuca Regional Health 7.74% 0.79% 12.83% 3.22% -9.27% 3.06%
Goulburn Valley Health -0.25% 1.13% 6.13% -2.01% -4.67% 0.07%
Latrobe Regional Hospital 7.86% -3.62% -3.31% -1.54% -0.58% -0.24%
Northeast Health Wangaratta -2.38% -2.28% -2.29% -1.89% -4.04% -2.57%
South West Healthcare -2.65% -0.98% -1.77% -2.71% 17.52% 1.88%
Swan Hill District Hospital 0.91% -4.44% -0.71% 1.89% -4.28% -1.32%
West Gippsland Healthcare Group 0.56% 1.19% 4.05% 0.37% -4.24% 0.39%
Western District Health Service 1.73% 0.71% 1.16% 0.64% 0.05% 0.86%
Wimmera Health Care Group -2.79% -2.61% -1.14% -2.32% -5.45% -2.86%
Regional hospital average 1.01% -0.33% 1.12% -0.25% -1.74% -0.04%
Underlying result %
Regional hospitals
Source: Victorian Auditor-General’s Office.
Appendix B. Financial sustainability
46 Acquittal Report Annex C: Public Hospitals Victorian Auditor-General’s Report
Figure B7 Liquidity 2006 to 2010
2006 2007 2008 2009 2010 Mean TrendAlbury Wodonga Health 0.50 0.58 0.64 0.76 0.90 0.68
Bairnsdale Regional Health Service 1.16 1.30 1.44 1.55 1.62 1.41
Ballarat Health Services 0.50 0.50 0.51 0.36 0.48 0.47
Barwon Health 0.98 0.91 0.89 0.89 0.70 0.87
Bendigo Health Care Group 0.59 0.75 0.87 0.81 0.60 0.72
Central Gippsland Health Service 0.58 0.72 0.83 0.88 0.88 0.78
Echuca Regional Health 0.67 0.54 1.28 1.18 0.95 0.92
Goulburn Valley Health 0.68 0.66 0.88 0.83 0.68 0.75
Latrobe Regional Hospital 1.18 0.48 0.57 0.86 1.19 0.85
Northeast Health Wangaratta 0.74 0.91 0.93 0.92 0.88 0.88
South West Healthcare 1.14 0.98 1.25 1.03 1.27 1.13
Swan Hill District Hospital 1.94 1.85 1.68 1.82 2.03 1.87
West Gippsland Healthcare Group 1.40 1.03 1.00 1.04 1.00 1.09
Western District Health Service 2.31 2.06 2.50 2.23 2.29 2.28
Wimmera Health Care Group 0.52 0.72 0.86 0.80 0.94 0.77
Regional hospital average 0.99 0.93 1.08 1.06 1.10 1.03
Liquidity
Regional hospitals
Source: Victorian Auditor-General’s Office.
Appendix B. Financial sustainability
Victorian Auditor-General’s Report Acquittal Report Annex C: Public Hospitals 47
Figure B8 Average number of days cash available 2006 to 2010
2006 2007 2008 2009 2010 Mean TrendAlbury Wodonga Health 4.95 10.24 13.09 32.56 30.19 18.21
Bairnsdale Regional Health Service 39.63 23.57 37.32 61.79 73.76 47.21
Ballarat Health Services 6.26 4.98 1.25 5.43 9.00 5.38
Barwon Health 21.20 16.63 11.25 5.21 7.03 12.26
Bendigo Health Care Group 10.33 14.18 21.70 16.34 3.44 13.20
Central Gippsland Health Service 13.96 19.29 17.45 14.18 18.33 16.64
Echuca Regional Health 34.14 12.64 0.23 7.20 0.71 10.98
Goulburn Valley Health 15.30 18.97 9.35 12.67 3.05 11.87
Latrobe Regional Hospital 48.29 3.69 4.16 11.28 25.17 18.52
Northeast Health Wangaratta 4.45 5.40 1.58 0.75 4.73 3.38
South West Healthcare 32.60 20.56 28.92 22.22 51.89 31.24
Swan Hill District Hospital 95.21 71.03 87.08 94.95 84.25 86.50
West Gippsland Healthcare Group 49.04 50.96 56.79 58.87 57.02 54.54
Western District Health Service 27.50 38.33 42.85 49.22 38.93 39.37
Wimmera Health Care Group 6.68 12.79 9.18 13.31 0.13 8.42
Regional hospital average 27.30 21.55 22.81 27.06 27.18 25.18
Average number of days cash available
Regional hospitals
Source: Victorian Auditor-General’s Office.
Appendix B. Financial sustainability
48 Acquittal Report Annex C: Public Hospitals Victorian Auditor-General’s Report
Figure B9 Self-financing (%) 2006 to 2010
2006 2007 2008 2009 2010 Mean TrendAlbury Wodonga Health 3.44% 3.42% 2.50% 8.22% 6.91% 4.90%
Bairnsdale Regional Health Service 10.78% 8.98% 7.62% 9.29% 4.51% 8.24%
Ballarat Health Services 6.17% 6.51% 6.07% 4.37% 6.34% 5.89%
Barwon Health 10.70% 5.07% 6.81% 4.71% 5.84% 6.63%
Bendigo Health Care Group 4.06% 4.82% 7.83% 4.78% 8.22% 5.94%
Central Gippsland Health Service 6.32% 8.27% 3.07% 4.09% 2.48% 4.84%
Echuca Regional Health 21.21% 1.98% 10.74% 7.84% 2.62% 8.88%
Goulburn Valley Health 5.28% 4.66% 11.49% 6.38% -1.40% 5.28%
Latrobe Regional Hospital 11.54% 0.58% 2.90% 2.79% 6.55% 4.87%
Northeast Health Wangaratta 2.26% 1.86% 1.69% 1.66% 4.39% 2.37%
South West Healthcare 3.85% 2.93% 3.76% 0.70% 21.00% 6.45%
Swan Hill District Hospital 10.72% 0.23% 5.37% 6.04% 3.60% 5.19%
West Gippsland Healthcare Group 6.47% 9.21% 11.34% 5.06% 5.12% 7.44%
Western District Health Service 5.40% 8.47% 5.17% 7.94% 7.01% 6.80%
Wimmera Health Care Group 0.63% 4.49% 3.29% 4.84% -1.48% 2.35%
Regional hospital average 7.26% 4.77% 5.98% 5.25% 5.45% 5.74%
Self-financing %
Regional hospitals
Source: Victorian Auditor-General’s Office.
Appendix B. Financial sustainability
Victorian Auditor-General’s Report Acquittal Report Annex C: Public Hospitals 49
Figure B10 Capital replacement 2006 to 2010
2006 2007 2008 2009 2010 Mean TrendAlbury Wodonga Health 0.49 0.57 1.21 1.41 1.46 1.03
Bairnsdale Regional Health Service 1.25 2.95 1.35 0.78 0.55 1.38
Ballarat Health Services 2.62 2.19 2.35 1.59 0.69 1.89
Barwon Health 4.31 3.13 3.32 1.54 1.24 2.71
Bendigo Health Care Group 1.03 0.76 1.25 1.79 1.56 1.28
Central Gippsland Health Service 0.52 1.26 0.63 0.96 0.45 0.76
Echuca Regional Health 2.88 1.24 2.77 1.55 0.50 1.79
Goulburn Valley Health 2.86 1.36 2.87 1.74 0.66 1.90
Latrobe Regional Hospital 9.34 1.04 0.95 0.52 0.21 2.41
Northeast Health Wangaratta 0.86 2.66 2.26 0.82 0.62 1.44
South West Healthcare 1.37 1.29 1.61 4.20 3.76 2.45
Swan Hill District Hospital 1.18 0.83 0.86 0.88 0.54 0.86
West Gippsland Healthcare Group 2.20 2.69 2.07 0.98 0.58 1.71
Western District Health Service 1.14 1.17 1.03 1.47 0.57 1.08
Wimmera Health Care Group 0.89 0.82 0.64 1.25 0.36 0.79
Regional hospital average 2.20 1.60 1.68 1.43 0.92 1.56
Capital replacement
Regional hospitals
Source: Victorian Auditor-General’s Office.
Appendix B. Financial sustainability
50 Acquittal Report Annex C: Public Hospitals Victorian Auditor-General’s Report
Rural hospitals
Figure B11 Underlying result (%) 2006 to 2010
2006 2007 2008 2009 2010 Mean TrendAlexandra District Hospital 7.62% 6.24% 7.96% 8.37% 41.92% 14.42%
Alpine Health -3.55% -1.57% -2.19% -4.97% -8.65% -4.19%
Bass Coast Regional Health -1.27% 0.76% -2.45% -4.96% -1.69% -1.92%
Beaufort & Skipton Health Services 0.01% -3.67% -4.95% -5.50% -4.69% -3.76%
Beechworth Health Service -4.18% -0.77% -6.12% -6.62% -12.10% -5.95%
Benalla and District Memorial Hospital 4.35% 0.49% 0.93% 1.43% -3.20% 0.80%
Boort District Hospital 1.40% -5.38% -2.82% 13.45% -7.35% -0.14%
Casterton Memorial Hospital -2.52% 2.88% 1.10% 2.95% -7.00% -0.52%
Castlemaine Health -1.43% -1.49% -1.33% 0.26% -12.42% -3.28%
Cobram District Hospital -2.47% -0.53% 1.37% 0.94% 1.85% 0.23%
Cohuna District Hospital -1.31% -6.46% -2.69% 2.52% -5.56% -2.70%
Colac Area Health 19.19% 2.17% 1.42% -0.65% -9.02% 2.62%
Djerriwarrh Health Services 11.60% 27.58% -4.30% -0.88% -1.02% 6.60%
Dunmunkle Health Services -3.65% -0.39% 7.93% 26.76% -5.87% 4.96%
East Grampians Health Service -5.97% 1.17% 0.52% 0.41% -3.51% -1.48%
East Wimmera Health Service -2.02% -0.98% -4.61% -3.97% -12.03% -4.72%
Edenhope and District Hospital 0.21% 2.61% 9.76% 2.43% -15.47% -0.09%
Gippsland Southern Health Service 2.98% 6.14% 4.44% -1.28% -3.55% 1.75%
Heathcote Health -4.02% -5.60% -0.87% -6.40% -14.20% -6.22%
Hepburn Health Service 0.43% 1.29% -0.37% -2.23% 8.55% 1.54%
Hesse Rural Health Service 12.27% 3.43% 15.49% 13.54% -5.38% 7.87%
Heywood Rural Health 2.33% -0.75% -2.57% -0.36% -8.54% -1.98%
Inglewood and District Health Service -0.98% -3.42% 0.61% -4.39% -3.58% -2.35%
Kerang District Health -2.14% -4.31% 2.35% -0.63% -3.60% -1.67%
Kilmore and District Hospital -3.24% -3.76% 1.09% -3.66% -10.71% -4.06%
Kooweerup Regional Health Service 16.93% 6.33% 11.87% 17.29% 3.90% 11.26%
Kyabram and District Health Services 3.99% 2.16% 0.91% 19.10% -4.30% 4.37%
Kyneton District Health Service -1.68% -3.31% 0.51% 0.48% -11.94% -3.19%
Underlying result %
Rural hospitals
Appendix B. Financial sustainability
Victorian Auditor-General’s Report Acquittal Report Annex C: Public Hospitals 51
Figure B11 Underlying result (%) 2006 to 2010 – continued
2006 2007 2008 2009 2010 Mean TrendLorne Community Hospital 26.72% -0.68% -6.66% -5.15% -16.05% -0.36%
Maldon Hospital 3.23% 5.28% 3.74% 4.63% -5.07% 2.36%
Mallee Track Health and Community Services 9.57% 4.84% -2.77% 5.30% -13.98% 0.59%
Mansfield District Hospital -1.71% -3.09% 0.17% -5.54% -5.67% -3.17%
Maryborough District Health Service 20.24% 5.83% 3.99% 0.10% -3.96% 5.24%
Moyne Health Services 6.51% 0.95% 5.88% 1.21% -2.07% 2.49%
Nathalia District Hospital -2.39% -0.92% 1.78% -8.19% 47.67% 7.59%
Numurkah District Health Service 4.02% 4.44% 12.05% 6.55% -5.82% 4.25%
Omeo District Health -7.16% -0.24% -6.29% -3.42% -7.57% -4.94%
Orbost Regional Health 0.84% -1.31% 2.37% 4.27% -5.97% 0.04%
Otway Health & Community Services 4.23% 12.11% 4.35% 7.15% 0.66% 5.70%
Portland District Health -5.95% -1.92% -2.81% -1.05% -9.34% -4.22%
Robinvale District Health Services 0.91% 6.02% 2.77% 2.18% -3.15% 1.75%
Rochester and Elmore District Health Service 2.65% -7.48% 42.82% 39.67% 26.11% 20.75%
Rural Northwest Health 15.48% 5.30% 44.57% 6.03% -9.90% 12.29%
Seymour District Memorial Hospital 33.90% -3.41% -0.09% -8.27% -6.03% 3.22%
South Gippsland Hospital -7.45% 2.75% 5.18% 8.47% -7.26% 0.34%
Stawell Regional Health -3.76% -0.87% 2.50% -0.32% -5.20% -1.53%
Tallangatta Health Service 4.17% 0.90% -4.97% -3.81% -12.75% -3.29%
Terang and Mortlake Health Service 4.67% 1.35% 1.73% 3.73% -5.31% 1.23%
Timboon and District Healthcare Service 18.85% 20.58% 21.26% 20.57% 2.35% 16.72%
Upper Murray Health & Community Services 5.76% 1.78% 14.28% 6.34% -4.86% 4.66%
West Wimmera Health Service 8.78% 2.05% 5.23% 1.53% -5.97% 2.33%
Yarram & District Health Service 6.18% 4.57% 4.11% -3.20% -9.44% 0.44%
Yarrawonga District Health Service -15.94% 0.50% -1.30% 0.06% -11.51% -5.64%
Yea & District Memorial Hospital -0.21% -10.20% -1.88% 7.73% -1.10% -1.13%
Rural hospital average 3.24% 1.30% 3.43% 2.78% -3.71% 1.41%
Underlying result %
Rural hospitals
Source: Victorian Auditor-General’s Office.
Appendix B. Financial sustainability
52 Acquittal Report Annex C: Public Hospitals Victorian Auditor-General’s Report
Figure B12 Liquidity 2006 to 2010
2006 2007 2008 2009 2010 Mean TrendAlexandra District Hospital 4.04 5.18 5.10 6.98 9.33 6.13
Alpine Health 0.48 0.55 0.64 0.60 0.63 0.58
Bass Coast Regional Health 0.93 0.96 1.05 0.76 0.72 0.88
Beaufort & Skipton Health Services 1.57 2.46 2.03 2.04 2.76 2.17
Beechworth Health Service 1.58 1.68 1.67 1.01 1.12 1.41
Benalla and District Memorial Hospital 3.09 2.47 3.11 3.37 2.79 2.97
Boort District Hospital 1.40 1.50 1.64 2.00 2.01 1.71
Casterton Memorial Hospital 0.69 0.90 1.08 1.31 1.41 1.08
Castlemaine Health 1.12 1.11 1.01 1.12 0.98 1.07
Cobram District Hospital 2.33 2.00 2.09 2.08 1.69 2.04
Cohuna District Hospital 1.74 1.77 1.60 1.82 1.84 1.75
Colac Area Health 0.56 0.73 0.68 0.72 0.45 0.63
Djerriwarrh Health Services 0.77 0.67 0.74 0.99 1.01 0.84
Dunmunkle Health Services 0.94 1.39 1.05 0.80 0.97 1.03
East Grampians Health Service 1.47 1.20 1.23 1.34 1.43 1.33
East Wimmera Health Service 2.44 2.34 1.37 1.10 1.08 1.66
Edenhope and District Hospital 1.42 1.59 2.01 2.24 1.79 1.81
Gippsland Southern Health Service 3.44 3.31 2.81 3.38 3.28 3.24
Heathcote Health 4.15 4.00 5.70 3.17 4.42 4.29
Hepburn Health Service 1.59 2.29 2.38 1.83 1.49 1.91
Hesse Rural Health Service 0.93 0.95 0.99 0.25 0.27 0.68
Heywood Rural Health 1.01 1.17 1.13 1.09 1.18 1.12
Inglewood and District Health Service 1.40 1.33 1.38 1.41 1.44 1.39
Kerang District Health 0.85 1.17 1.80 1.75 2.24 1.56
Kilmore and District Hospital 2.43 1.29 1.29 1.20 1.15 1.47
Kooweerup Regional Health Service 1.13 1.21 1.57 1.34 1.28 1.31
Kyabram and District Health Services 4.85 1.69 2.03 2.42 2.18 2.64
Kyneton District Health Service 1.21 0.79 1.01 0.81 0.34 0.83
Liquidity
Rural hospitals
Appendix B. Financial sustainability
Victorian Auditor-General’s Report Acquittal Report Annex C: Public Hospitals 53
Figure B12 Liquidity 2006 to 2010 – continued
2006 2007 2008 2009 2010 Mean TrendLorne Community Hospital 1.65 2.08 2.53 2.21 1.95 2.08
Maldon Hospital 1.91 2.13 2.29 2.70 2.38 2.28
Mallee Track Health and Community Services 4.98 4.77 4.32 4.89 4.19 4.63
Mansfield District Hospital 0.62 0.69 0.77 0.73 0.89 0.74
Maryborough District Health Service 2.15 2.14 2.39 1.79 1.51 1.99
Moyne Health Services 0.94 0.90 1.09 1.09 1.06 1.02
Nathalia District Hospital 2.19 2.14 2.58 3.25 2.50 2.53
Numurkah District Health Service 1.18 1.28 1.63 1.72 1.72 1.50
Omeo District Health 1.08 1.49 1.61 1.66 1.80 1.53
Orbost Regional Health 1.48 1.52 1.67 2.08 2.47 1.85
Otway Health & Community Services 1.29 1.45 1.35 1.47 1.71 1.45
Portland District Health 0.63 0.78 1.07 0.94 0.70 0.82
Robinvale District Health Services 3.47 2.16 1.66 1.94 1.54 2.15
Rochester and Elmore District Health Service 0.76 0.96 1.29 1.31 1.27 1.12
Rural Northwest Health 1.25 1.35 1.84 1.88 1.96 1.66
Seymour District Memorial Hospital 2.51 4.46 5.87 2.62 2.63 3.62
South Gippsland Hospital 2.96 3.40 3.74 4.33 2.95 3.48
Stawell Regional Health 1.17 1.12 1.49 1.50 1.53 1.36
Tallangatta Health Service 1.41 1.58 1.35 1.19 1.18 1.34
Terang and Mortlake Health Service 2.55 2.55 2.71 2.21 1.93 2.39
Timboon and District Healthcare Service 7.52 7.37 10.38 12.98 16.99 11.05
Upper Murray Health & Community Services 1.16 0.90 1.24 1.21 1.35 1.17
West Wimmera Health Service 0.61 0.68 1.11 1.24 1.39 1.01
Yarram & District Health Service 2.39 2.74 0.61 2.13 1.98 1.97
Yarrawonga District Health Service 0.88 1.04 1.14 1.14 1.14 1.07
Yea & District Memorial Hospital 2.28 1.99 2.15 2.51 2.03 2.19
Rural hospital average 1.86 1.88 2.04 2.07 2.11 1.99
Liquidity
Rural hospitals
Source: Victorian Auditor-General’s Office.
Appendix B. Financial sustainability
54 Acquittal Report Annex C: Public Hospitals Victorian Auditor-General’s Report
Figure B13 Average number of days cash available 2006 to 2010
2006 2007 2008 2009 2010 Mean TrendAlexandra District Hospital 47.79 61.57 53.49 28.90 37.44 45.84
Alpine Health 13.56 34.20 37.17 32.85 19.67 27.49
Bass Coast Regional Health 29.27 49.30 20.03 5.81 0.46 20.97
Beaufort & Skipton Health Services 66.75 28.55 26.93 100.42 67.14 57.96
Beechworth Health Service 33.40 43.64 50.72 36.68 14.20 35.73
Benalla and District Memorial Hospital 17.34 27.65 37.95 78.72 96.36 51.60
Boort District Hospital 72.61 45.64 29.10 65.72 49.23 52.46
Casterton Memorial Hospital 18.26 76.86 98.05 95.92 107.60 79.34
Castlemaine Health 55.76 49.72 32.32 41.82 40.23 43.97
Cobram District Hospital 46.59 26.89 28.00 23.36 33.03 31.57
Cohuna District Hospital 53.45 32.97 44.93 51.41 60.66 48.68
Colac Area Health 15.81 21.88 11.71 16.52 6.79 14.54
Djerriwarrh Health Services 5.50 3.05 3.07 20.97 9.21 8.36
Dunmunkle Health Services 9.93 20.92 15.43 21.96 9.55 15.56
East Grampians Health Service 46.26 36.19 44.99 50.69 57.29 47.09
East Wimmera Health Service 31.54 36.58 27.47 17.86 23.76 27.44
Edenhope and District Hospital 83.33 136.03 185.77 139.48 111.86 131.29
Gippsland Southern Health Service 7.30 3.37 9.09 0.52 9.74 6.00
Heathcote Health 70.50 20.64 30.54 7.35 26.76 31.16
Hepburn Health Service 25.61 49.06 50.14 64.20 12.00 40.20
Hesse Rural Health Service 84.02 23.24 53.91 50.76 34.20 49.23
Heywood Rural Health 15.22 50.14 52.64 51.05 70.23 47.85
Inglewood and District Health Service 25.60 26.49 26.56 12.24 29.94 24.17
Kerang District Health 39.45 41.17 48.99 40.67 14.79 37.01
Kilmore and District Hospital 32.18 21.60 8.92 29.04 13.63 21.07
Kooweerup Regional Health Service 21.75 2.50 2.31 13.13 42.13 16.36
Kyabram and District Health Services 29.32 22.74 5.40 26.99 25.78 22.05
Kyneton District Health Service 15.00 7.43 21.85 10.76 6.79 12.36
Average number of days cash available
Rural hospitals
Appendix B. Financial sustainability
Victorian Auditor-General’s Report Acquittal Report Annex C: Public Hospitals 55
Figure B13 Average number of days cash available 2006 to 2010 – continued
2006 2007 2008 2009 2010 Mean TrendLorne Community Hospital 32.12 93.31 138.74 104.91 32.26 80.27
Maldon Hospital 105.52 123.26 31.51 14.21 31.93 61.29
Mallee Track Health and Community Services 50.53 39.52 37.67 48.99 21.79 39.70
Mansfield District Hospital 6.88 9.95 1.94 7.52 10.95 7.45
Maryborough District Health Service 77.04 34.36 60.15 15.46 13.02 40.01
Moyne Health Services 85.63 93.36 89.57 39.63 8.19 63.28
Nathalia District Hospital 20.46 21.86 85.25 87.07 54.66 53.86
Numurkah District Health Service 50.05 67.57 117.10 126.48 135.14 99.27
Omeo District Health 50.65 58.83 75.56 87.32 47.30 63.93
Orbost Regional Health 82.73 51.02 79.47 128.65 100.36 88.45
Otway Health & Community Services 48.48 13.23 7.12 15.78 19.85 20.89
Portland District Health 13.04 11.71 15.69 41.06 11.57 18.62
Robinvale District Health Services 105.84 117.54 81.99 88.04 54.75 89.63
Rochester and Elmore District Health Service 31.16 72.40 115.65 104.85 79.63 80.74
Rural Northwest Health 29.71 83.71 56.66 141.12 129.18 88.07
Seymour District Memorial Hospital 59.35 18.93 26.28 16.31 15.45 27.27
South Gippsland Hospital 171.51 207.49 54.49 31.12 23.01 97.52
Stawell Regional Health 3.70 23.96 40.90 28.06 41.89 27.70
Tallangatta Health Service 98.72 87.70 111.20 103.23 9.20 82.01
Terang and Mortlake Health Service 26.28 29.05 32.73 31.05 8.84 25.59
Timboon and District Healthcare Service 67.89 87.50 66.27 122.89 57.40 80.39
Upper Murray Health & Community Services 68.97 45.97 65.26 61.71 78.11 64.01
West Wimmera Health Service 17.17 25.41 73.86 68.25 80.93 53.12
Yarram & District Health Service 125.71 164.40 157.61 143.61 48.10 127.88
Yarrawonga District Health Service 16.46 30.65 1.27 27.15 25.42 20.19
Yea & District Memorial Hospital 68.63 86.41 52.41 86.42 0.88 58.95
Rural hospital average 46.80 49.98 50.63 53.83 40.19 48.29
Average number of days' cash available
Rural hospitals
Source: Victorian Auditor-General’s Office.
Appendix B. Financial sustainability
56 Acquittal Report Annex C: Public Hospitals Victorian Auditor-General’s Report
Figure B14 Self-financing (%) 2006 to 2010
2006 2007 2008 2009 2010 Mean TrendAlexandra District Hospital 15.10% 9.14% 17.90% 18.80% 44.76% 21.14%
Alpine Health 4.16% 6.75% 3.88% 3.06% -0.56% 3.46%
Bass Coast Regional Health 4.92% 6.32% 2.87% 0.12% 2.15% 3.28%
Beaufort & Skipton Health Services 7.51% 0.95% 10.50% 6.57% -3.32% 4.44%
Beechworth Health Service -0.27% 7.74% 0.51% 7.00% -2.62% 2.47%
Benalla and District Memorial Hospital 9.34% 7.67% 7.74% 11.98% 4.18% 8.18%
Boort District Hospital 8.95% 3.43% -3.64% 15.77% 4.41% 5.78%
Casterton Memorial Hospital 8.73% 10.35% 7.01% 4.84% 6.98% 7.58%
Castlemaine Health 13.45% 2.91% 4.15% 0.00% 1.38% 4.38%
Cobram District Hospital 4.23% 5.07% 7.94% 2.81% 17.20% 7.45%
Cohuna District Hospital 6.72% -1.39% 4.41% 4.83% 6.06% 4.12%
Colac Area Health 26.70% 9.88% 5.23% 1.70% -1.73% 8.35%
Djerriwarrh Health Services 2.51% 14.86% 4.83% 9.46% 3.23% 6.98%
Dunmunkle Health Services 0.16% 6.88% 12.39% 29.87% -0.88% 9.68%
East Grampians Health Service 1.44% 8.56% 6.86% 5.90% 5.38% 5.63%
East Wimmera Health Service -0.08% 8.13% 0.62% 4.01% 4.20% 3.38%
Edenhope and District Hospital 3.32% 15.06% 17.09% 1.18% -2.21% 6.89%
Gippsland Southern Health Service 14.72% 10.60% 9.77% 4.71% 7.96% 9.55%
Heathcote Health 3.66% 3.55% 0.71% -1.85% 1.65% 1.54%
Hepburn Health Service 4.11% 8.91% 6.11% 4.53% 15.05% 7.74%
Hesse Rural Health Service 13.18% 10.92% 20.43% 20.61% 4.58% 13.94%
Heywood Rural Health 9.94% 1.08% 4.74% 4.84% 6.59% 5.44%
Inglewood and District Health Service 2.64% 8.64% 9.06% 5.50% 8.69% 6.91%
Kerang District Health 6.52% 5.97% 7.00% 3.52% 5.78% 5.76%
Kilmore and District Hospital 4.35% 1.51% 3.69% 7.98% -1.07% 3.29%
Kooweerup Regional Health Service 20.38% 13.43% 16.82% 20.45% 19.29% 18.07%
Kyabram and District Health Services 6.20% 8.01% 2.22% 10.20% 6.23% 6.57%
Kyneton District Health Service 10.13% -0.47% 9.45% 6.95% 3.34% 5.88%
Self-financing %
Rural hospitals
Appendix B. Financial sustainability
Victorian Auditor-General’s Report Acquittal Report Annex C: Public Hospitals 57
Figure B14 Self-financing (%) 2006 to 2010 – continued
2006 2007 2008 2009 2010 Mean TrendLorne Community Hospital 33.62% 18.16% 7.48% 2.57% 0.34% 12.43%
Maldon Hospital 10.16% 10.04% 10.08% 0.63% 17.00% 9.58%
Mallee Track Health and Community Services 16.18% 11.77% 7.87% 12.56% 3.07% 10.29%
Mansfield District Hospital 6.03% 5.53% 3.21% 3.83% 4.39% 4.60%
Maryborough District Health Service 27.63% 12.44% 8.92% 6.27% 2.15% 11.48%
Moyne Health Services 26.68% 5.33% 12.89% 7.40% 9.36% 12.33%
Nathalia District Hospital 4.97% 5.11% -1.78% 8.19% 52.84% 13.86%
Numurkah District Health Service 12.76% 8.30% 17.33% 11.60% 5.20% 11.04%
Omeo District Health 13.77% 5.49% 5.29% 6.08% 5.02% 7.13%
Orbost Regional Health 9.77% 5.12% 7.60% 14.53% 1.33% 7.67%
Otway Health & Community Services 10.47% 17.06% 7.57% 10.04% 7.94% 10.62%
Portland District Health 1.70% 10.84% 0.40% 5.11% -3.25% 2.96%
Robinvale District Health Services 8.74% 14.33% 6.50% 1.91% 14.40% 9.18%
Rochester and Elmore District Health Service 6.83% 2.31% 43.83% 42.54% 34.84% 26.07%
Rural Northwest Health 11.84% 21.53% 42.23% 12.97% 3.68% 18.45%
Seymour District Memorial Hospital 41.77% 3.41% 4.82% 0.36% 1.22% 10.31%
South Gippsland Hospital 10.06% 5.74% 8.02% 16.75% -2.23% 7.67%
Stawell Regional Health 3.36% 10.57% 5.18% 3.76% 3.68% 5.31%
Tallangatta Health Service 17.30% 1.89% 10.79% 0.01% 1.16% 6.23%
Terang and Mortlake Health Service 10.14% 5.86% 5.72% 4.36% 7.68% 6.75%
Timboon and District Healthcare Service 25.64% 28.32% 26.04% 27.01% 13.71% 24.15%
Upper Murray Health & Community Services 9.35% 7.82% 17.21% 10.08% 6.44% 10.18%
West Wimmera Health Service 16.78% 8.87% 13.47% 4.24% 7.35% 10.14%
Yarram & District Health Service 22.53% 11.08% 8.56% 4.96% 1.66% 9.76%
Yarrawonga District Health Service 1.39% 4.85% 7.89% 8.06% 3.04% 5.04%
Yea & District Memorial Hospital 12.69% 8.57% 1.96% 11.65% 18.30% 10.63%
Rural hospital average 10.83% 8.24% 9.06% 8.39% 7.17% 8.74%
Self-financing %
Rural hospitals
Source: Victorian Auditor-General’s Office.
Appendix B. Financial sustainability
58 Acquittal Report Annex C: Public Hospitals Victorian Auditor-General’s Report
Figure B15 Capital replacement 2006 to 2010
2006 2007 2008 2009 2010 Mean TrendAlexandra District Hospital 1.11 0.89 1.03 1.75 4.06 1.77
Alpine Health 0.33 0.44 0.87 0.63 0.17 0.49
Bass Coast Regional Health 1.07 1.18 0.88 1.22 0.98 1.07
Beaufort & Skipton Health Services 4.19 11.23 1.37 0.09 0.17 3.41
Beechworth Health Service 0.85 0.67 0.37 0.50 0.34 0.55
Benalla and District Memorial Hospital 3.61 0.92 1.17 0.87 0.91 1.50
Boort District Hospital 1.10 2.10 0.83 1.30 0.47 1.16
Casterton Memorial Hospital 0.24 0.83 0.24 0.71 0.29 0.46
Castlemaine Health 2.28 5.96 1.64 0.47 0.21 2.11
Cobram District Hospital 0.60 1.36 1.54 1.26 2.10 1.37
Cohuna District Hospital 1.31 0.44 0.49 0.62 0.32 0.64
Colac Area Health 7.11 2.24 1.78 0.49 0.32 2.38
Djerriwarrh Health Services 1.58 3.56 0.80 0.73 0.89 1.51
Dunmunkle Health Services 0.78 0.98 2.47 10.11 0.49 2.97
East Grampians Health Service 4.71 5.61 0.95 0.77 0.49 2.50
East Wimmera Health Service 0.92 0.86 1.22 1.21 0.32 0.91
Edenhope and District Hospital 1.52 0.66 0.91 2.02 0.35 1.09
Gippsland Southern Health Service 1.77 1.48 3.57 5.85 0.27 2.59
Heathcote Health 0.53 1.71 0.77 1.73 0.44 1.04
Hepburn Health Service 1.09 0.83 0.55 2.23 2.93 1.53
Hesse Rural Health Service 1.69 1.62 4.49 12.53 0.99 4.27
Heywood Rural Health 0.81 0.59 0.94 0.71 0.19 0.65
Inglewood and District Health Service 0.76 1.94 1.12 1.42 0.51 1.15
Kerang District Health 0.49 0.84 0.53 0.70 0.21 0.55
Kilmore and District Hospital 0.95 0.61 1.76 0.68 0.28 0.85
Kooweerup Regional Health Service 1.70 1.04 1.13 6.48 1.36 2.34
Kyabram and District Health Services 1.61 2.30 3.66 0.98 0.24 1.76
Kyneton District Health Service 0.89 2.20 1.07 2.04 1.05 1.45
Capital replacement
Rural hospitals
Appendix B. Financial sustainability
Victorian Auditor-General’s Report Acquittal Report Annex C: Public Hospitals 59
Figure B15 Capital replacement 2006 to 2010 – continued
2006 2007 2008 2009 2010 Mean TrendLorne Community Hospital 5.46 0.66 0.29 0.39 0.37 1.43
Maldon Hospital 0.02 0.92 0.39 1.07 0.55 0.59
Mallee Track Health and Community Services 1.17 1.72 1.45 1.16 0.57 1.21
Mansfield District Hospital 1.11 0.97 1.52 0.72 0.34 0.93
Maryborough District Health Service 4.58 2.44 0.86 3.73 1.11 2.54
Moyne Health Services 6.18 0.54 0.29 0.89 0.89 1.76
Nathalia District Hospital 1.43 1.78 15.58 58.23 14.28 18.26
Numurkah District Health Service 1.80 0.74 0.54 1.00 0.43 0.90
Omeo District Health 4.94 0.54 0.05 0.47 0.25 1.25
Orbost Regional Health 1.46 1.12 1.05 0.79 0.60 1.00
Otway Health & Community Services 1.00 1.61 2.80 0.53 0.78 1.35
Portland District Health 0.89 4.88 1.05 0.81 0.31 1.59
Robinvale District Health Services 3.31 3.38 4.57 1.08 0.55 2.58
Rochester and Elmore District Health Service 1.62 3.41 14.97 10.77 4.81 7.12
Rural Northwest Health 3.88 16.03 16.82 1.63 0.25 7.72
Seymour District Memorial Hospital 12.88 4.46 0.66 1.69 0.76 4.09
South Gippsland Hospital 0.73 1.04 1.41 3.36 2.13 1.74
Stawell Regional Health 2.13 1.84 0.59 1.38 0.49 1.29
Tallangatta Health Service 0.60 0.59 1.02 0.79 0.39 0.68
Terang and Mortlake Health Service 2.19 1.91 1.70 1.49 0.50 1.56
Timboon and District Healthcare Service 1.05 1.93 0.31 1.09 0.57 0.99
Upper Murray Health & Community Services 0.95 3.39 4.45 2.88 0.20 2.37
West Wimmera Health Service 0.54 0.48 0.49 1.10 0.32 0.59
Yarram & District Health Service 0.45 0.92 1.89 1.36 0.34 0.99
Yarrawonga District Health Service 14.64 3.81 0.75 1.18 0.15 4.10
Yea & District Memorial Hospital 0.80 0.40 0.24 0.56 1.59 0.72
Rural hospital average 2.25 2.16 2.11 2.97 1.02 2.10
Capital replacement
Rural hospitals
Source: Victorian Auditor-General’s Office.
Victorian Auditor-General’s Report Acquittal Report Annex A: Public Hospitals 61
Appendix C. Audit Act 1994 section 16—submissions and comments
Introduction In accordance with section 16(3) of the Audit Act 1994 a copy of this report, or relevant extracts from the report, was provided to the Department of Health and all named agencies with a request for submissions or comments.
The submissions and comments provided for publication are not subject to audit nor the evidentiary standards required to reach an audit conclusion. Responsibility for the accuracy, fairness and balance of those comments rests solely with the agency head.
Contents • Audit Act 1994 section 16 submissions and comments received ........................ 62
• Department of Health ..................................................................................... 62
Appendix C. Audit Act 1994 section 16—submissions and comments
62 Acquittal Report Annex A: Public Hospitals Victorian Auditor-General’s Report
Submissions and comments received
RESPONSE provided by the Secretary of the Department of Health
Appendix C. Audit Act 1994 section 16—submissions and comments
Victorian Auditor-General’s Report Acquittal Report Annex A: Public Hospitals 63
RESPONSE provided by the Secretary of the Department of Health – continued